Which to pay first - Mortgage or Student Loan?

phill79

Hi,

Couldn't decide which topic to put this in, so it ended up here.

Basically, my OH has a £13000 student loan and I have a £70000 mortgage (~4.5% for another year) - no other debts

We used most of the student loan as deposit on the house.

Now that we have 2 incomes coming in, we'd like to pay more of our debts off.
My question is, would you pay off more on the mortgage or pay more of the student loan.

Also, if we were to leave the country to work, what happens to the student loan, will it still be paid. I'm not talking about skipping the country and leaving the debts, I'd like it to be paid.

Any help is greatly appreciated.

saubryn

My inclination would be pay off the mortgage. If the worst happens and you end up unemployed / on a lower wage, the students loan company are sympathetic, and you'd probably be glad you didn't have to worry about the mortgage any more.

No idea about working abroad though.

CLAPTON

pay the loan of with the highest APR... presumably the mortgage.

if you go abroad you must still pay the student loan off... look at
https://www.slc.co.uk
there is a section about what to do if you go abroad.

Dr.Shoe_2

At the moment the mortgage is at 4.5% so I'd be inclined to overpay a little on that and put the rest on the student loan and then when your mortgage goes up you've already got the larger payment covered and then you could transfer the SL overpayment into the mortgage.

Another alternative is to put the extra cash into a high interest account and then when you have enough, use it to pay off the student loan in one lump (you might get a rebate). The reason for this is that you should get up to 5.75%+ on savings and you're only paying 4.5% on the mortgage and probably the same on the SL.

Use both the SL payments and your regular saving amount towards your mortgage and pay it off early...

phill79

Thanks for your help everyone,

Phill