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Mortgage / Loan help!
richardcalver
Posts: 10 Forumite
Hi,
I looking for some help and advice, I’ve been looking over and over again at the figure work and I think I’ve probably looked too much and the answer I need is looking me right in the face!
I have a outstanding mortgage of £140k – this was over a 30 year period (fixed at 6.69% for 2 years) but I’m now on a variable rate (currently 2.59%) and have no penalties for making over payments.
Secondly I have a unsecured loan of £26k over the same period – currently also at 2.59%, If I needed to remortgage I wouldn’t be able to combine the two products but I’ve been making overpayments to my unsecured loan – It started at £32K and I’m down to £26K so I’ve been going at it!
What I’m unsure about is should I be making the overpayments to the unsecured loan to lower it, or even better clear it before interest rate rises or attack my mortgage more?.... at the moment I’m paying £600 a month towards the mortgage and at least £500 to the loan – normally around a £1000 though.
Any help would be greatly appreciated.
Rich
I looking for some help and advice, I’ve been looking over and over again at the figure work and I think I’ve probably looked too much and the answer I need is looking me right in the face!
I have a outstanding mortgage of £140k – this was over a 30 year period (fixed at 6.69% for 2 years) but I’m now on a variable rate (currently 2.59%) and have no penalties for making over payments.
Secondly I have a unsecured loan of £26k over the same period – currently also at 2.59%, If I needed to remortgage I wouldn’t be able to combine the two products but I’ve been making overpayments to my unsecured loan – It started at £32K and I’m down to £26K so I’ve been going at it!
What I’m unsure about is should I be making the overpayments to the unsecured loan to lower it, or even better clear it before interest rate rises or attack my mortgage more?.... at the moment I’m paying £600 a month towards the mortgage and at least £500 to the loan – normally around a £1000 though.
Any help would be greatly appreciated.
Rich
0
Comments
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Firstly dont combine them, never turn unsecured to secured debt.
If the loan is fixed, then overpay on the mortgage as that is more likely to rise up and cost you more.Although no trees were harmed during the creation of this post, a large number of electrons were greatly inconvenienced.
There are two ways of constructing a software design: One way is to make it so simple that there are obviously no deficiencies, and the other way is to make it so complicated that there are no obvious deficiencies0 -
Thanks for your message.....
They are both on a variable rate of 2.59% so they could (and most probably will) increase at some point.
What I'm not sure about is if I should really attack the £26k unsecured loan before I start going after the mortgage with big over payments?
I was thinking of paying what I have to on the mortgage of £530 currently and maybe add £50 or £100 overpayment then with the 26k unsecured pay the standard £101 a month with a bigger say £500 min overpayment?
just trying to get my head around what is the best path.
Thanks so far though!0 -
its swings and roundabouts really. it used to be that you would want to overpay on the mortgage, because maybe lenders would ignore the loan - but now they take all debts into account.
although, overpaying on the mortgage would still decrease your loan-to-value rate, which could help you get a better mortgage rate/deal should you need it.
are the products linked and is the loan secured?0 -
Hi...
No the products are not linked together, the loan (26k) is unsecured.
Rich0 -
As long as you are not near negative equity, pay off the unsecured loan - it will be easier to deal with it that way than to pay it off if you move - which will make the mortgage application that bit easier.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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