Overpay mortgage or get loan to pay NR unsecured mortgage loan?

aliman2000

Hi,

We have a Northern Rock mortgage which has been going for 4 years. We have one of those together mortgages where part of the mortgage is an unsecured loan. The current amount we owe is:

Total = £97600
Secured = £78750
Unsecured £18850

I've started working offshore so we now have a fair bit of extra money. We're almost at the end of clearing all debts (student debts, credit cards etc.) apart from the mortgage.

I had a quick look at what we should be doing with regards to the mortgage. Should we get a personal loan for £18850 and pay off the unsecured loan? This would be ~£400 month over 5 years and would mean that the monthly mortgage payment of £600 would go to servicing the secured part rather than 70% secured 30% unsecured.

Or should we up the monthly mortgage payment to £1k to pay it off faster?

Cheers
Ally

getmore4less

What's the interest rate on the mrotgage/loan?
What's the interest rate on the personal loan?

No point in getting a loan if the mortgage is cheaper.

What are your plans, eg when do you think you will be moving soon.

dimbo61

Best personal loan I could find was with Tesco 8.3% and payments about £382 a month for 5 years.
Guessing but I doubt that you are paying 8.3% on your mortgage so contact NR and ask can you overpay loan and then overpay as much as possible each month making sure overpayment comes off loan and not mortgage balance.

aliman2000

Hi, thanks for the info. The mortgage is currently 4.79% (SVR). I didn't realise I could specify where the overpayment went to, I'll call them up and get that sorted.

Cheers again
Ally