Today, I have been offered....

endemoniada_2

A payment holiday on my mortgage
But more interestingly.....
Virgin have offered me 0% on BT's until January 07.

Now, at present I have a 87K mortgage at 5% - payment 550 a month
11.5k on 2 X 0% cards next summer - min payment 300 a month

My Mortgage is with Northern Rock who allegedly don't charge me for overpayments or drawbacks.

My available balance on Virgin is 18K - should I swap 18K of my mortgage onto this card until January?????

MrsTinks

can you guarantee that they will let you put the £18k back on your mortgage? If anything should happen and you can't get it put back on your mortgage then the intrest on the card would probably be pretty high to say the least...

Kevicho

Can you pay off this amount (the 18K) as well as keep up the other payments?

(note before jan 2007)

lynzpower

Is the payment holiday, one where they still charge you interest each month on the mortgage, but you dont have to pay it ie putting it off to a later date?

endemoniada_2

I would not be able to pay off the 18k - want to do this to purely save interest on mortgage and reduce it a bit
.Say min payment was 150 then 6 months of this would be nearly 1K so effectively shaving off 1K off my mortgage.
The min payment on my other 0% cards is around 300 a month - so, I will have paid off around 4K on these by next year.
I will definitely ensure that I can add back on to the mortgage at end of 0% term I also have a cahoot loan at 5% which i have kept for emergencies -
£0 balance - in case I can't get 0% card in time, lol.

I'm trying to get my head round what savings in interest I would make

endemoniada_2

lynzpower wrote:

Is the payment holiday, one where they still charge you interest each month on the mortgage, but you dont have to pay it ie putting it off to a later date?

Yes probably - so, defeats the purpose really for me.
It would help to pay for summer childcare though!

dinkylou

When you say next summer, do you mean july/aug 07?

If this is the case then I would nt change the balance on those cards.

I also would nt transfer the 18k as this might be difficult and when the 0% period runs out, you might be having difficulties.

Dont forget that during payment holiday, you still add on interest to your mortgage.

If you can afford min payments at moment, I would nt do anything.

endemoniada_2

dinkylou wrote:

When you say next summer, do you mean july/aug 07?

If this is the case then I would nt change the balance on those cards.

I also would nt transfer the 18k as this might be difficult and when the 0% period runs out, you might be having difficulties.

Dont forget that during payment holiday, you still add on interest to your mortgage.

If you can afford min payments at moment, I would nt do anything.

Thanks for the advice.
The balance will change by making the minimum repayments they will be reduced by 4k unintentionally,lol

I thought the intention of DFW was to pay off the biggest interest first - in this case the mortgage - which I could reduce by 1k if i put the 18K onto Virgin.

I would only be increasing my outgoings by £150 a month, which I have covered.

I've just checked my mortgage bumff and it is a flexible mortgage which allows me to overpay and borrowback anytime ( will need to double check for charges)

CLAPTON

there seems to be no benefit of having the mortgage payment holiday as interest accumulates during that time

if you can transfer 18,000 for say 7 months saving 5% this will save you £525 although ypou still have to pay monthly amounts to the cc which reduces the benefit a bit. however, if there are no mortgage penalties for over paying or withdrawing when you need to clear the CC and the CC doesnot charge a balance transfer fee then it seems well worth doing.

endemoniada_2

CLAPTON wrote:

there seems to be no benefit of having the mortgage payment holiday as interest accumulates during that time

if you can transfer 18,000 for say 7 months saving 5% this will save you £525 although ypou still have to pay monthly amounts to the cc which reduces the benefit a bit. however, if there are no mortgage penalties for over paying or withdrawing when you need to clear the CC and the CC doesnot charge a balance transfer fee then it seems well worth doing.

Thanks Clapton - £525 is a worthwhile amount, especially when added to the 1K that I would pay towards the 18k.
When i first got this mortgage 2 yrs ago, I had just started a new job and couldn't get the full amount- so had around 20K on CC to buy the house, as well as a 15 k loan.
Since then, I have remortgaged and with the remaining debt I have always managed to transfer balances to 0% or low interest cards when offers run out. For some reason my existing cards keep on offering me at the right time. I do have the old favourite EGG anniversary offer too.

I am due a 1K bonus next month too and this discussion has helped me relise that it should go into mortgage not debt ( while it's on 0 % card)