New House... New Mortgage

swardlaw

Hello Money savers

This is my first post on this site so hello everyone.

I am in the process of moving at the moment. We have found the house we like and our's is up for sale. The house is a new build so we know the price. My situation is i'm a bit confused over the best route for me with my mix of mortgae and personal loan borrowing.

The situation is :

New house cost £210000
Equity from Sale of current ~= £50000
so i need mortgage of £160000 (20yrs)
My salary is £38700
No credit card debt to speak of
Personal loan of £16000 with repayment of £460 per month

I've had a broker offer me a few mortages which are quite straight forward with a few different flavours (fixed, discount etc) but the one option i'm pondering is bundling the personal loan with the mortgage. This would obviously decrease my monthly outgoings in total but would in effect increase the personal loan term to that of my mortgage or to look at it another way it would take 16000 from my equity. What do you people think of these options?

herbiesjp

Like you say if you add the loan to the mortgage it will in effect be paid over the 20 years so whilst it is cheaper monthly, overall it probably will become more expensive.

However, you could also take out a mortgage that allows overpayments and calculates interest daily, and potentially overpay each month to bring down this extra £16000 as quickly as possible.