Negative equity & Student Loan

Stoo_Pot

Hi,

I bought a house in 2008 for 137k with a former partner which seems to now only be valued at 125k.

I have moved out and until recently have been paying rent and mortgage which was not fun. The mortgage is about £650pcm at the moment as rates are low. A lodger contributes £250pcm and I split the remainder with my former partner i.e. £200pcm each.

2 years of mortgage payments have hardly made a dent in the total mortgage.

I already have approx 17.5k student loan but no other debts other than the mortgage.

I am about to start a full time post graduate course which offers a combination of grants and student loan.

I should be able to easily cover payments and live off the grants alone for the year but took the option of taking the offered student loan of approx 4k anyway.

Due to the differential rates of interest, would it be a good idea to pay off 4k of the mortgage with the student loan money? Perhaps I could convince my former partner to match my 4k and we pay off 8k in total. I imagine there is no point putting the money in a savings account instead.

As long as I can hold my head above the water I would still not like to sell the house straight away at such a loss but using this money to pay off a bit of the mortgage could perhaps ease the interest payments in the short term.

If I had enough savings to pay off the negative equity(say 12k) and sell the house at its current market value, it probably wouldnt be wise to do it anyway as that money could buy me time in terms of mortgage payments (£12k/£200pcm = 5 years) by which time the value could have gone up to near its original value.

I have the mortgage hanging around my neck at the moment and I would like to get rid and move on with my life but the best decision financially seems to be to hold onto it even though I don't live there anymore.

Any advice would be appreciated.

Stoo_Pot

To distill the actual questions from this:

Would it be wise to put 4k student loan into mortgage to start cutting down negative equity?

Is it likely that I am I realistically going to have to hold on to the property in the medium term i.e. next few years.

Perhaps this should have been in the mortgages forum but it is about problems with two types of debt *shrug*