Stoozing to overpay mortgage - help required!

joshieg3011

Hi there,

This is my first post, so please be patient! I've just read a post on the Mortgage Free Wannabee board where someone was saying he had paid off his mortgage early by borrowing money on 0% credit cards (the money from the credit card was being paid straight into his bank account, I think) and he was using this money to pay to his mortgage. Firstly, how do you go about this? If I borrowed, say, £5,000 on a 0% interest card and then paid this straight into my bank account and used this interest free money to go towards the mortgage, surely I would still have to continue to find the money for the mortgage, as well as the credit card to pay off??!

Any help would be greatly appreciated!

Thanks in advance!

Eydon

Hi,
First off, in order to do this you need either a credit card that allows Super Balance Transfers (i.e. you can transfer a fictional overdraft to the card, so the money goes straight into your bank account), or you need what's called a mule card (Egg Money for example), which allows you to have positive balances, in association with your 0% offer card. You then transfer a fictional balance from your mule card to your 0% offer card, creating a positive balance on your mule card, which you can then transfer into your bank account.

Having said all that, with interest rates as low as they are at the moment, it's not really worth the hassle - because by the time you've paid the balance transfer fee on your 0% offer card (typically between 2.9% and 5% of the balance transferred) you don't actually save that much money.

And of course, you still have to pay your regular mortgage payment, as well as the minimum payment on your 0% offer card. What you are actually saving on is the interest charged on your mortgage.

CannyJock

Eydon wrote: »

Hi,
First off, in order to do this you need either a credit card that allows Super Balance Transfers (i.e. you can transfer a fictional overdraft to the card, so the money goes straight into your bank account), or you need what's called a mule card (Egg Money for example), which allows you to have positive balances, in association with your 0% offer card. You then transfer a fictional balance from your mule card to your 0% offer card, creating a positive balance on your mule card, which you can then transfer into your bank account.

Having said all that, with interest rates as low as they are at the moment, it's not really worth the hassle - because by the time you've paid the balance transfer fee on your 0% offer card (typically between 2.9% and 5% of the balance transferred) you don't actually save that much money.

And of course, you still have to pay your regular mortgage payment, as well as the minimum payment on your 0% offer card. What you are actually saving on is the interest charged on your mortgage.

Egg Money card no longer available - better to go for a SBT card like the Virgin Money card.

You also need an offset mortgage to make it feasible to be able to take the money back out at the end of the 0% period. Only alternative is to be confident you can transfer the debt to another card before the 0% period expires.

At the end of the day it comes down to the APR on your mortgage compared to the notional APR of say 2.4%-3% on a credit card (Virgin Money is 3% fee for 15 months)

co123456

Eydon wrote: »

Having said all that, with interest rates as low as they are at the moment, it's not really worth the hassle

Unless you fixed your mortgage at say 6.09%...... but agreed - stoozing for profit is lots of work for lowered returns.

jd87

What is the APR of your mortgage, because remember you have to pay a 3% fee on the balance transfer, which basically means an APR of 3%-ish.

co123456

jd87 wrote: »

What is the APR of your mortgage, because remember you have to pay a 3% fee on the balance transfer, which basically means an APR of 3%-ish.

.... however if you slow stooze this equates to the full 6.09%.

Amazing how many big ticket items can be stoozed, and re-stoozed (if it's been called that before)