Pay off some Mortgage or car loan

littlelegz

Hi there,

Can anyone help? I am remortgageing soon and i have a car loan of about £3500 left and the APR is 9%, My question is should i take out my saving and pay the car off (No early payment penalties) which will free up
£225 p/c/m and then pay towards my mortgage. Or should i just pay my saving into the mortgage and keep the car loan going for the last 3 years.

Any help would be great

Berkshiregirl

Assuming your car loan is at a higher interest rate than your mortgage, you should pay that off first. That said, if you're looking to move or re-mortgage soon, you may need to put the money towards your mortgage so your LTV is better.

Assuming you're staying put in your house, it would be the car loan I'd pay off first.

Jonbvn

Always pay-off the higher loan first, unless there are other issues such as early repayment charges etc.

Given that your car loan is at 9%, it is sure to be higher than your mortgage. Therefore, pay-off the car loan first.

littlelegz

Jonbvn wrote: »

Always pay-off the higher loan first, unless there are other issues such as early repayment charges etc.

Given that your car loan is at 9%, it is sure to be higher than your mortgage. Therefore, pay-off the car loan first.

My LVT is only 41% so i might as well pay the car off now. Its only sitting in bonds!!!