We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Savings v mortgage loan

seh567
seh567 Posts: 286 Forumite
Part of the Furniture 100 Posts Combo Breaker
Hi

I need to borrow £5k to assist a family member and am not sure whether to borrow on my mortgage or use my savings.

I have a small flexible mortgage with Nationwide, currently owing £2.2k which is due to end in August next year. Over the years I have overpaid so I have credit of £20k which I can draw down without penalty. They have said I can borrow the extra £5k paying £225 per month over 36 months which equates to approximately £750 interest.

I have £18k savings in an ISA paying 6% interest.

I am now retired and don't really want to deplete my savings so I am gearing towards borrowing on my mortgage re above but I am not sure this is the right thing to do.

Any advice would be appreciated.

Comments

  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    Basically if you can borrow at a lower rate than your saving earn (after tax) then borrow otherwise us your savings...
    whether its wise to lend to a family member is another matter
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 347.2K Banking & Borrowing
  • 251.6K Reduce Debt & Boost Income
  • 451.8K Spending & Discounts
  • 239.5K Work, Benefits & Business
  • 615.4K Mortgages, Homes & Bills
  • 175.1K Life & Family
  • 252.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.