Remortgage with debts or not?

gardnt1

Hi all,

I'm after some advice if possible.
My fixed rate with NR is up at the end of this month and its time to remortgage.

At present I pay approx £600 to credit cards and have approx £24000 debt!
I can fix my rate with NR at 4.99% for 15 years (mortgage has 17 years to run) and is fully flexible and have additional lending. With this additional lending and other savings, I can clear all £24000 and pay £186 a month extra on my mortgage (approx £60 of that attributed to rate rise anyway).

Question that bothers me is that I am extending the term of my debt assuming I make no overpayments to mortgage , but the benefits are approx £500 a month take home pay.

Any thoughts /suggestions?

Other question I have is that if i make overpayments to mortgage to reduce interst paid on debt and reduce mortgage term, I am better having a 10 year fix rather than 15 as if I reduce term to much I will have a charge to pay back for paying mortgage off early?
are overpayments only worth it if you have no tie ins?

thanks

MarkyMarkD

I can fix my rate with NR at 4.99% for 15 years (mortgage has 17 years to run) and is fully flexible and have additional lending.

Other question I have is that if i make overpayments to mortgage to reduce interst paid on debt and reduce mortgage term, I am better having a 10 year fix rather than 15 as if I reduce term too much I will have a charge to pay back for paying mortgage off early?

Are overpayments only worth it if you have no tie ins?

Which is it then?

Fully flexible (i.e. you can make unlimited overpayments without penalty) or subject to penalties?

In answer to your question, it depends how likely your overpayments are to exceed the limit allowed by the terms. Mortgages often allow 10% overpayment in any one year - and very few people actually overpay that much (city high-fliers excepted).

Going back to your general query, if you are paying substantially more than 5% on your debts, and you have sufficient income to get the further advance from NR, it may be a financially sound way to proceed. If you are really bothered about the term being too high, you could have the further advance on a different (shorter) term than the rest of the loan - then the overpayment limit (if there is one) would be less of an issue because your regular payments would be larger.

gardnt1

hi,

i can make overpayments without penalty, the penalty i was refering to was early payment of loan because of the overpayments reducing length of borrowing......its all confuses me!

I am only concerned at the time taken to reduce other debts because I have a feeling that im not doing it the best money saving way!