Small re-mortgage

Hello, first-time poster looking for some advice please

We own our home, technically mortgage-free (parental loan paying back £430 month for next 3 years and that's it).

We have about £20k unsecured debt and are looking to borrow £30k against the house to clear this off and buy a car, on a ten year term.

Thing is, we are hoping to move house in the next year or two so I was looking to find out what kind of product will best suit us given that we'll be needing a 'regular' mortgage to incorporate this one and buy a new home.

I'm thinking to go for an interest-only mortgage and divert the difference between that and a repayment into a savings plan. This is now the part where I would like some advice on please.

Over to you

Replies

  • getmore4lessgetmore4less Forumite
    45K Posts
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    ✭✭✭✭✭
    Only save if you can save at a better rate than any debt you have unlikley wven with a mortgage.

    Do you have a plan that stops you getting into more debt?

    A 10 year car loan is not a good idea.
  • VIGILANT22VIGILANT22 Forumite
    2.5K Posts
    [QUOTE=sunshine_kid;

    So you want debt to service debt?
    You want a savings plan but also a 10yr car loan!!
    Discuss this with a whole of market mortgage adviser...
  • Thanks for the replies.

    Essentially yes, debt to service debt - currently there's about £20k on credit with crippling interest rates. Monthly, it costs about £700 in repayments. Without getting into how we got in this position, we want to 'wipe the slate clean' and cut up the plastic.

    What I'm after is a mortgage that won't land me with penalties for paying it off early, ie in 2 years time when we sell this house and get a bigger mortgage.

    The reason I'm thinking interest-only is because as I understand it, a repayment morgage would only be paying off interest (mostly) for the first couple of years anyway. But that's why I started the thread, to ask anyone here if there was a better way of doing this, and specifically what's the best option for paying off a mortgage after 2 years?

    Point taken about a 10 year car loan as well - I'm re-thinking that now as it does seem a bit excessive.

    Any input gratefully received
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