what should i do with my savings(approx £5500)

ukclarkkent

hello,

i've got approx £5500 savings right now and am wondering what's best to do with it. my isa of 2.8% is full up, i can't overpay on my mortgage more than i am without incurring penalties either.

i've got an outstanding car loan of roughly the same amount and that's at 8.5%.

however i might be moving house next summer so i'm wondering will a big sum of money help me get a better deal with hsbc when i come to remortgage with them. my current LTV is 70%.

thanks for any ideas/thoughts.

p.s. posted this on the mortgage section too as i wouldn't want to get rid of it to find that i could have used it better if i remortgage.

me

Mols

Hi

I would pay off the car loan, then put the amount you are paying on the repayments into a savings account to build up your savings again.

Mols

xrjtg

If you can pay off the car loan then that's the best bet. Otherwise, if you would put it towards the purchase of your next house, keep it an instant access account: you're best option is probably the Lloyds Vantage current account, which pay 4% on balances between £5000 and £7000 if you pay in £1000 a month (which can just be a Faster Payments transfer out to another account and then straight back in again).

ukclarkkent

Mols wrote: »

Hi

I would pay off the car loan, then put the amount you are paying on the repayments into a savings account to build up your savings again.

Mols

thanks mols. yeah that really does seem to be the best idea. i have the discipline to do that but you know what it's like to have an "extra " £234 a month...it can always be spent on something.

another reliable poster mentions about me having to have a 10% in a deposit to re-mortgage but i didn't know that. that might spanner my plans...

ukclarkkent

xrjtg wrote: »

If you can pay off the car loan then that's the best bet. Otherwise, if you would put it towards the purchase of your next house, keep it an instant access account: you're best option is probably the Lloyds Vantage current account, which pay 4% on balances between £5000 and £7000 if you pay in £1000 a month (which can just be a Faster Payments transfer out to another account and then straight back in again).

thanks xrjtg. that's another way of looking at it. didn't think of that one...however i've already got 2 current accounts and not sure if i can be 4rsed in getting another one...

the more i think about it the better it gets. thanks again.

Pwilky

Given depreciation factors, I wouldn't pay off your car loan...8.5 per cent is good going.

Cash is king in the current climate...keep you options open.

joerugby

Is the 8.5% apr or a flat rate?

ukclarkkent

joerugby wrote: »

Is the 8.5% apr or a flat rate?

just checked my papers and i made a li'l mistake. the apr seems to be 8% but further down the page it has an annual rate of interest of 7.74%.

hope that makes things clearer...i'm more confused now ;-)

ukclarkkent

Pwilky wrote: »

Given depreciation factors, I wouldn't pay off your car loan...8.5 per cent is good going.

Cash is king in the current climate...keep you options open.

thanks pwilky. had another thought too...if i keep my tesco loan current then perhaps they'll be more eager to lend me some more money if i request it...

xrjtg

If you don't need the money then there's absolutely no point in maintaining a loan of 8.5%, no matter how likely you think you are to get such a rate again. I also wouldn't worry too much about "upsetting" Tesco.

Regarding a "deposit" for a remortgage, I'd be amazed if the equity in the house isn't treated in exactly the same way as additional cash.

ukclarkkent

xrjtg wrote: »

If you don't need the money then there's absolutely no point in maintaining a loan of 8.5%, no matter how likely you think you are to get such a rate again. I also wouldn't worry too much about "upsetting" Tesco.

Regarding a "deposit" for a remortgage, I'd be amazed if the equity in the house isn't treated in exactly the same way as additional cash.

oh i'm not saying that i'd get a good rate like that but i do know that after x months of clean loan payments i can apply for more. i just thought it would be another open option is all.

i'd never heard of the deposit for a remortgage and some others have read and commented on that too so i think maybe it's not so true.

thanks for replying.