£55,000 loan possible?

Fundin

Hi,

My morgage is on a fixed rate 5.75% for about 5 years and I owe about £55k, with the massive drop in interest rates I was thinking I should take a loan at a lower rate, pay off fully my morgage and the penalty because it would be cheaper in the long run. I havne't had time to look around yet and not sure if it would even be possible to do this, what do people think?

LilacPixie

I think that it would not be cheaper in the long run. Not to mention getting a 55k loan that isn't a mortgage will be near on impossible.

JayZed

This is a non-starter. You won't find anyone offering you an unsecured loan of 55K.

In any case, even with a low BoE rate the interest rate on an unsecured loan would very probably be higher than on a secured (mortgage) loan. Besides, you wouldn't have the option of paying it back over 25 years - a 5-year term would be more likely - so your monthly repayments would be massive.

Stubbarama

I very much doubt that you will see unsecured and perosnla loans at a rate that would make it viable to swap any time soon. Plus as Lilac Pixie says, getting a perosnal loan of £55k is virtual impossible, expecialy in todays climate. I would have thought 20K would probably be around the ceiling and then you have to let them know what its for. Anything over this would be a secured loan on the property and therefore another mortgage.

You may be better of remortgaging and paying the penalty, but you will need to wait to see what new deals come out.