Bank loan or remortgage ?

ginoespo

Hi,

Can't seem to get my head round this one so can anyone please advise.

I intend to purchase a new car in the next couple of months using the Govt car scrappage scheme. I'll still need approx 5-9k depending on what i choose. I have 7 years left on my fixed rate mortgage. Would it be cheaper to get a bank loan over 5 years or borrow more from the mortgage Co over the remaining 7 years ? My fixed rate is 5.25 %.

CLAPTON

cheapest way is probably to keep the existing car and save up for the new one.

will the mortgage company give tou such a small loan?
what rate will they charge
what fees will they charge
if the above is OK then that's probably the second cheapest way of financing your motoring

Batchy

why does everyone feel the need to buy on credit...?

Just lease the car... ;-)... no worries about resale then in what has been a volatile second hand market!

JimmyTheWig

Agree about not buying being the cheapest option!

The other thing to consider is what happens if the worst comes to the worst and you can't pay the money back.
If it was added to your mortgage then that would be secured against your house. If you couldn't repay then the bank could take your home.

Batchy

I take back the leasing option... its VERY expensive at the moment... OMG... my car would work out x2 what im currently paying. Im astounded.

Rafter

Adding to your mortgage is normally expensive with the arrangement fees higher than the interest saving - remember you are also putting your home at risk.

As others have suggested, better to go for motor finance of some sort - if you aren't bothered too much about the car brand just look for ones with good finance deals.

Otherwise if your credit rating is great and you don't have too much existing debt you could get an unsecured loan - at least then your home isn't at risk if you lost your job and couldn't keep up payments on the car loan.

Good luck

R.