Mortgage Over Payment Reserve

burtoc

Hi (hope I am posting this in the right place)

I have my mortgage with nw and am currently on part fixed and part base rate payments.

On the base rate mortgage I currently have a £3k over payment reserve.

Now my question is, would it make sense to take the £3k out and payoff my credit card which is currently 15.9% apr. My monthly payment will increase by about £15 per month on the mortgage, which is a lot cheaper than my monthly credit card minimum payment.

If I was to take out the £3k, I would be left with just about 10% equity in the house.

In my head this makes sense, but the other half is playing devils advocate, although has also said as it's my property it's my decision

Thanks

Comyface

The APR on your mortgage will undoubtedly be lower than your credit card, but I'd be wary of increasing your LTV to 90% at the moment, that's too high to give you any cushion if prices continue to fall (which I believe they will). Also, depending on the term of your mortgage you could pay back more overall anyway, spreading it over longer.

If you did do it, I would carry on paying the same payments that you were paying to your credit card and get rid of it asap.

Alternatively, how about a 0% balance transfer to another credit card?

burtoc

Thanks

I was planning on using the monthly payment that used to go on the credit card to over pay the mortgage, so will be knocking the equity off at a quicker rate, esp as I am now on 2.5% apr for part of it (and building up the reserve again :T )


i'm not sure about applying for another card, about 2 years ago I was turned down for one and I don't want to have to feel that p*ssed off feeling if I get told no again!!!!