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which to pay off first?
lollipop_28
Posts: 49 Forumite
Hi There
I'm trying to get my finances in order. I've currently got an IO mortgage but I want to start overpaying on it as though it was a repayment mortgage.
Mortgage is for just short of £204k with 21 years remaining. Interest rate is 2.49% (tracker of 1.99% above BR) so monthly payments are £422 a month. Earlier this year I took out a HSBC personal loan of £14k to pay for an extension due to not having enough equity in the house to borrow against it. This is at a rate of 7.5% with 42 months remaining on it. The loan repayments are £340 a month.
My question is.. would it be better to overpay on the loan or the mortgage?
Any advice would be greatly appreciated.
I'm trying to get my finances in order. I've currently got an IO mortgage but I want to start overpaying on it as though it was a repayment mortgage.
Mortgage is for just short of £204k with 21 years remaining. Interest rate is 2.49% (tracker of 1.99% above BR) so monthly payments are £422 a month. Earlier this year I took out a HSBC personal loan of £14k to pay for an extension due to not having enough equity in the house to borrow against it. This is at a rate of 7.5% with 42 months remaining on it. The loan repayments are £340 a month.
My question is.. would it be better to overpay on the loan or the mortgage?
Any advice would be greatly appreciated.
0
Comments
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it's easy.
The loan as you pay more per pound borrowed than on the mortgage.
Clear that off first, then hit the mortgage.Feb 2012 - onwards MF achieved
September 2016 - Back into clearing a mortgage - Was due to be paid off in 32 years in March 2047 -
April 2018 down to 28.00 months vs 30.04 months at normal payment.
Predicted mortgage clearing 03/2047 - now looking at 02/2045
Aims: 1) To pay off mortgage within 20 years - 20370 -
Loan first presuming overpaying is allowed.MF aim 10th December 2020 :j:eek:MFW 2012 no86 OP 0/2000
0 -
LilacPixie wrote: »Loan first presuming overpaying is allowed.
Ah good point!! I'll have to check that.0 -
i put mortgage/loan together ---but targeting loan first
but monthly always good to see TOTAL figure come down£48515 interest £181 (2009)debt/mortgage-MFIT/T2/T3
debt/mortgage free 28/11/14
vanguard shares index isa £1000
credit union £400
emergency fund£500
#81 save 2018£42000
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