do i use savings to pay off 2 sub mortgages

merty

Hi all, This is my first posting after frequently reading the threads on here.I would like some advice and opinions on the following scenario.

currently have a £65k morgtgage with Woolwich, 9 years to run currently paying £630 per month on a current tracker interest rate of 1.19 %. 0.69 % over base, this is a lifetime tracker.property is valued at circa £285000.

I also have 2 sub loans, one for an extension and the other for school fees.

sub loan 1 £25000 over 9 years running along side above loan, fixed rate of 3.89 %, paying £263 per month.
sub loan2 £23000 over 9 years also rrnning alonside main loan, fixed rate of 3.69 %, paying £239 month.

I have savings of around £45000 which reaps me currently about 5 %, circa £2300 per year.
also have unit trusts, uk growth fund m& g, used for the children , currently worth about £9k.
Also have a build soc a/c with nearly £3 k in.

my thoughts are that my son and daughter will finish secondary schools in 3-4 years time and , the money i have saved will be needed for uni fees etc. I will be paying sub loan 2 off, for some 7 years after my daughter has finished school!!.it is also nice to have some savings for back up and in case of emergency etc

paying off the 2 sub loans would net me just over £500 extra disposable income a month

we have a joint income of some £80 k a year
Your views would be greatly appreciated

Fiddlestick

What's a "sub loan"?

merty

its just extra borrowing against the house, 2 additional loans

RAS

are these additional mortgages or secured loans? What are the early redemption penalties?

merty

thanks for your replies, they are secured loans against the house, one of them has a penalty of about £1000, and they run alongside the main loan