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  • FIRST POST
    • Aceshigh
    • By Aceshigh 5th Feb 18, 8:31 PM
    • 5Posts
    • 0Thanks
    Aceshigh
    Loan or Mortgage ?
    • #1
    • 5th Feb 18, 8:31 PM
    Loan or Mortgage ? 5th Feb 18 at 8:31 PM
    Hi, after some advice.
    My wife and I have a mortgage with the Nationwide BS at present. There are actually two separate payments per month making a total out-going of about £350. We owe approx £26,160 on the mortgage but was wondering for that amount would it make more sense to perhaps get a personal loan as these interest rates can be lower. We have about six and a half years left to pay, any thoughts ?

    Aceshigh
Page 1
    • zx81
    • By zx81 5th Feb 18, 8:33 PM
    • 15,522 Posts
    • 16,467 Thanks
    zx81
    • #2
    • 5th Feb 18, 8:33 PM
    • #2
    • 5th Feb 18, 8:33 PM
    Loan rates tend to be higher than mortgages, especially on that sum.

    However, you may not be able to remortgage for such a low amount.

    What is your current rate?
    • Aceshigh
    • By Aceshigh 5th Feb 18, 9:18 PM
    • 5 Posts
    • 0 Thanks
    Aceshigh
    • #3
    • 5th Feb 18, 9:18 PM
    • #3
    • 5th Feb 18, 9:18 PM
    Variable rate of 3.99%. I can get 3% from First Direct on a personal loan.
    • zx81
    • By zx81 5th Feb 18, 9:23 PM
    • 15,522 Posts
    • 16,467 Thanks
    zx81
    • #4
    • 5th Feb 18, 9:23 PM
    • #4
    • 5th Feb 18, 9:23 PM
    Variable rate of 3.99%. I can get 3% from First Direct on a personal loan.
    Originally posted by Aceshigh
    Is that an offer you've had from them, or just something you've seen on their website?

    You could get a mortgage rate of less than that, but again, only if you're able.
    • Shakin Steve
    • By Shakin Steve 5th Feb 18, 9:28 PM
    • 1,324 Posts
    • 1,003 Thanks
    Shakin Steve
    • #5
    • 5th Feb 18, 9:28 PM
    • #5
    • 5th Feb 18, 9:28 PM
    If you got the loan at 3%, you would save yourself around £750. Are there any early repayment charges on your mortgage?
    I came into this world with nothing and I've got most of it left.
    • Aceshigh
    • By Aceshigh 5th Feb 18, 9:28 PM
    • 5 Posts
    • 0 Thanks
    Aceshigh
    • #6
    • 5th Feb 18, 9:28 PM
    • #6
    • 5th Feb 18, 9:28 PM
    The 3% was an offer from 1st direct as I have been with them for a long time and have had loans from them before, all paid up in full and on time.
    • sivs
    • By sivs 6th Feb 18, 4:23 PM
    • 228 Posts
    • 55 Thanks
    sivs
    • #7
    • 6th Feb 18, 4:23 PM
    • #7
    • 6th Feb 18, 4:23 PM
    I would personally see if you can get a remortgage. I am sure I have seen somewhere that you can get a mortgage of £25k.

    Mortgage rates are low at the moment.

    You will get better advise if you post on the mortgage section as this will be viewed by mortgage advisers.

    Best of luck
    • purdyoaten2
    • By purdyoaten2 7th Feb 18, 11:04 AM
    • 824 Posts
    • 387 Thanks
    purdyoaten2
    • #8
    • 7th Feb 18, 11:04 AM
    • #8
    • 7th Feb 18, 11:04 AM
    There is 78 payments remaining on the mortgage at £350 per month which £27300 in total.
    A personal loan of £26150 from First Direct's website at 3.3% over 78 months works out at monthly repayments of £372.84 with a total repayable of £29081.

    I know what I would be doing.
    purdyoaten lost his password
    • Tarambor
    • By Tarambor 7th Feb 18, 2:34 PM
    • 2,232 Posts
    • 1,605 Thanks
    Tarambor
    • #9
    • 7th Feb 18, 2:34 PM
    • #9
    • 7th Feb 18, 2:34 PM
    Variable rate of 3.99%. I can get 3% from First Direct on a personal loan.
    Originally posted by Aceshigh
    The cheapest mortgage rate is less than half that.
    • Tarambor
    • By Tarambor 7th Feb 18, 2:37 PM
    • 2,232 Posts
    • 1,605 Thanks
    Tarambor
    Hi, after some advice.
    My wife and I have a mortgage with the Nationwide BS at present. There are actually two separate payments per month making a total out-going of about £350. We owe approx £26,160 on the mortgage but was wondering for that amount would it make more sense to perhaps get a personal loan as these interest rates can be lower. We have about six and a half years left to pay, any thoughts ?

    Aceshigh
    Originally posted by Aceshigh
    Remortgage with your current lender. Personal loans are going to be no cheaper than 3%, I'm paying 2.49% on a 5 year fix remortgage at 70% LTV so yours would be lower than that. Have you got any savings? If the interest rate on your savings is lower than the mortgage then you're better using the savings to repay the mortgage, ensuring you have an emergency fund. When you remortgage with the same lender you can use those to reduce the mortgage at the same time without penalty. I say the same lender because no mortgage company does mortgages below £25,000.
    • ReadingTim
    • By ReadingTim 7th Feb 18, 3:39 PM
    • 2,392 Posts
    • 3,396 Thanks
    ReadingTim
    See what rate you'd actually get on a loan if they give you a loan at all before making that decision - only 51% of successful applicants have to get the advertised rate, no matter how affordable they think their repayments are, how long they've banked with the proposed lender, how good their credit score is etc.

    Don't forget also that although the purpose of the loan is to repay other borrowings, there's no guarantee for the lender that you'll actually do that, so your current borrowings will be taken into account when assessing further borrowings - your current plan is basically doubling your debt.
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