How much will my payments reduce by...

padee

Currently with Nationwide. Current deal ends 30/11/10 -need to call Nationwide tomorrow to discuss my options.

Current deal is
6.78% 2 year fixed rate
Remaining term 21 years
Total amount to repay is circa 70k (LTV around 90%)

Letter from Nationwide states I'll revert to BMR which is guaranteed to be no more than 2% above BoE base rate.

My advisor said today I'd be as well just going onto the BMR which I expected. What I'm unsure of is;

1 - Using todays rate what would I be paying (current MRPs are £515).

2 - I have 4.5k of credit card debts. Any advice on whether or not I should keep paying £515 to reduce mortgage, or would I be better putting this money towards the c/card debt? I do have shares worth 1700 so was going to put this towards c/card debt and then clear over next 18 months or so.

Thanks.

sophievenusdoom

Personally, I think the latter option is the better option. Always clear secured debts before you clear unsecured debts.

dimbo61

I worked out your mortgage is about £69,000 and your payment will drop to about £352 once you drop onto the BMR of 2.5%

Use the extra £163 a month to clear some of your credit card debt and have a look on the debt free board at ways of cutting spending/ increasing income.

Stay on the BMR as long as possible as you wont get anything better with a LTV of 90%

shop-to-drop

If the unsecured debt (credit card) has higher interest rate I would have thought better to clear that first as long as the secured (mortgage) payments are met. When the credit cards are cleared then start making extra payments to the mortgage. However, teach yourself to not use credit cards so much or you may end up just spending the extra cash.

dannymccann

Clear credit cards asap, the interest rate on those will be minimum 15%.

Stay on BMR until the next round of rate rises (could be a year, could be 2), and overpay like a mentalist to get that LTV down. When the rate rises check out fix deals and compare to your BMR rate, if its safe enough for you to proceed and not lots more expensive than the new BMR would be go for it - but I am risk averse (I would rather fix at higher rate than risk staying on a lower rate to be burned in the future)