Personal Loan to pay off the mortage.?

mckenzieneil

I have been paying what I can back into my mortgage and have 17 yrs to go, but only 20K outstanding until I am mortgage free. I am currently paying £100 extra on top of what I am required to pay (as well as exra payments when I can) making a total of £390.
I am currently thinking about getting a personal loan to pay the balance, possibly with insurance, so I am reducing my years to around 5, and transfering the risk to my credit rather than the property.
I realise it would cost more, but is this worth it (for the sake of my home and peace of mind) and what's the Pro's and Con's.?

Jonbvn

Even with an unsecured loan, the lender could possibly get a charge on your property if you defaulted.

A personal loan will have a much higher interest rate than your mortgage. It is much better to just overpay on your mortgage. Why would you want to pay more interest?

CLAPTON

why does paying more and taking longer to pay off the debt improve your peace of mind?

mckenzieneil

Thanks, but a personal Loan, although more expensive, would reduce my years. That's how I see it, and given the financial climate in the UK, I would like to reduce the risk to my home as the banks are morally bankrupt and would grab the opportunity to repossess no matter how small the outstanding balance is.

mckenzieneil

Thanks, I am just looking at ways to reduce my risks (given the financial climate) and the fact that the banks are morally Bankrupt and would grab an opportunity to repossess no matter how small the balance is...I'm trying to look ahead

CLAPTON

mckenzieneil wrote: »

Thanks, but a personal Loan, although more expensive, would reduce my years. That's how I see it, and given the financial climate in the UK, I would like to reduce the risk to my home as the banks are morally bankrupt and would grab the opportunity to repossess no matter how small the outstanding balance is.

You will pay off the mortgage in about 5 years if you continue to pay 390 per month.
If the APR of the loan is greater than the mortgage then it will take longer to pay off the loan than the mortgage.

What is the APR of the mortgage? .. and the likely loan?

financialbliss

CLAPTON wrote: »

What is the APR of the mortgage? .. and the likely loan?

Was just reading this thread and you got there before me. You're unlikely to get a personal loan below your mortgage rate.

Financial Bliss.

mckenzieneil

The Mortgage APR is around 6.5 variable and the Load is 7.6 APR. Its about reducing my risk to the property and trying to tranfer it to the Loan/Credit if I can

financialbliss

mckenzieneil wrote: »

The Mortgage APR is around 6.5 variable and the Load is 7.6 APR. Its about reducing my risk to the property and trying to tranfer it to the Loan/Credit if I can

This may be news to some but your mortgage is already credit (debt).

Why not up your mortgage payment to the amount the loan would be - this should shorten the term?

Personally, if I was looking into this, I'd be looking at the lowest cost over the remainder of your mortgage term

Edit:
Which I should have said, will be your mortgage based on the rates you posted earlier - Clapton beat me to it again.

Financial Bliss.

CLAPTON

if you continue with the mortgage it will be paid off more quickly than with the loan.

mckenzieneil

Thanks, but I realise my mortgage is debt, but I am looking at pros/cons of an unsecured loan, against my mortgage that is secured against the propertly and trying to find out if it would be less risky rather than financialally cheaper. If all the financial doom that is going around becomes reality, then the financial costs could e greater in the long run