add on lump sum or extend term? Or both?

mcallister1

Hi-I have 2 years 10 months left on our mortgage with about £50k to pay on a great 1.9% tracker rate. A couple of years ago we added another 20k to pay for a car and other things- at 5.9% tracker ending at the same time. Now we are heading for a few years when we will have a lot of expense- 2 kids at Uni,one still at home- but at the end of 3 years things should be a lot easier. Our jobs are as secure as you can get and I'm wondering about adding some additional lending on again to sort some house things out and help with the year we have bot kids at University. Anyway after calling the lender and getting a quote for another lump sum- 15k- and also asking about extending the term of our main mortgage, I wondered if extending the term of the main mortgage might be miles cheaper than borrowing at a dearer rate. I'd like to pay less for a few years rather than struggle.
I'm sorry I haven't got exact figures here- the house is worth about 240k- in principle do you think that it would be better to keep that good tracker rate going rather than lose it? We are both 43 so there is no real time pressure- and although paying off the mortgage would be nice, I'm not sure it is worth much pain when we aren't looking to move up to a bigger house.
Any advice would be welcome.

iwantasmallholding

I did read that interest rates I due to start to climb at the end of this year, so the tracker won't be as good in say 18 months time when rates are up to around 2-3% and climbing higher. You say you jobs are as secure as the come, would you happen to be working for the police if so I have the answer PM me.

mcallister1

I looked again at the figures on the calculator and as I have a 0.67 tracker I am going to extend that with a view to reducing our payments this year and next so we can pay off our debts and get straight before the double uni year- and then pay for that year too. Then we will overpay for a few years and clear it- it is a gamble that interest rates won't go too high, but it is the cheapest borrowing we can get and actually it has given us the spur to sort out our budget and get rid of more expensive debt.