Mortgage is only 17K...aaaaah!

1moremile

Hi folks

Currently have a really horrible problem....my mortgage is so small that most lenders just laugh at me. My flat is worth approx £150k but the mortgage is only £17k. I am currently paying just the interest with an endowment as well, which probably won't pay out enough but that's another story....I have looked at changing it to a capital and interest but most lenders have a min of between £25 and £30k. So i was thinking of using the extra cash left over as an offset in an interest paying savings account. I only have 15 years left to go and would like to be mortgage free on this flat asap so that I can the move on with my soon to be new wife to bigger and better things. Does this make sense? I hope so as I getting confused myself. So question....

1. Which bank or building society is best to go?
2. Which type of mortage should I pick?
3. Don't have a third quesion yet but will probably think of one...

Hope I get someones interest....

Cheers

1MoreMile

peterg1965

Am no expert here but have you considered a personal (ie unsecured loan) over 10 years at a fixed interest rate? You can get a loan for an APR broadly similar to a mortgage rate, although you might find you monthly pament slightly higher. Your endowment policy then becomes a saving policy! The cost is approx £186/month over 10 years @ 5.8% APR fixed for £17000. That is without PPI.

Hope this helps

Pete

1moremile

Cheers Peter

Had never really considered that an option but could be worth looking into.

silvercar

You could get an offset mortgage of say £30k. So £17k is your current mortgage, the remaining £13k you put in the offset savings pot and effectively have a £17k mortgage. You won't get the absolute lowest rate on that but should get under 5%.

cloud_dog

Why don't you just talk to your existing lender and ask them if you can switch it to a repayment mortgage.

I'm not sure switching lenders will be beneficial on a relatively small amount (don't know your current mortgage rate) as you are likely to incur legal, valuation, arrangement, exit fees, etc.

Alternatively are you allowed to make overpayments, i.e. Nationwide allow up to £500pm over, others tend to allow (although this depends on your mortgage T's&C's) up to 10%pa.

Edit: Apologies, I sort of missed the bit about 'moving on with your new wife....'. If this is the case why do you need to pay off the mortgage surely, all you are looking to do is sell the property so that you can make use of the equity contained within it and are also free to take aout a new mortgage should you need / want to (again, if thats what you're looking to do).

Perhaps you need to clarify if you wish to just get rid of the mortgage as soon as possible, whilst retaining the flat, or you are trying to move into a new property with your new wife.

cloud_dog

cattie

Have you tried Nationwide? Only I know they are one of the very few mainstream lenders who will consider sub £25,000 mortgages.

Or as cloud_dog suggested, ask you existing mortgage provider about changing products. This is what I did when I remortgaged last year & it cost me nothing in fees to do so.

lapat

get a loan pay it off and the deeds are then yours
£17k loan over ten years would be nothing or get a loan for less and cash your endownment and pay the difference off

Be_Happy

We were in same position as you 3 years ago and took out £15,000 mortgage with Halifax. Came to end of 3 year fix 2 months ago, having paid off another £7,000 during that time. Had no trouble in getting new mortgage deal with Halifax for £8,000 mortgage.

1moremile

Oh boy pleanty to think about... thanks all for the advice, shall really take care of it when I'm back from Australia...

fez_2

Try the CIS (co-operative insurance society), they will come to your house at your convenience to sort the re-mortgage and they do a 6mth discount with no fees, legals or valuations for less than 25k