mortgage tussle

cheshire_1961

I am looking to remortgage. I can't quite get enough borrowings at the best rate being offered because I have money on credit cards which is hindering the best offer. The next best offer is £80 pm more. So - should I pay off my cards (both of which are on 0% interest) and leave myself with no savings? My head says yes - but I worry that I will then have nothing should I need to cover an unexpected bill. Also - is a tracker mortgage safe at the moment? Confused and a little anxious...grateful for any comments.

dimbo61

Use "whatsthecost" to work out how much extra you will pay on the 2 deals being offered.
If you have a debt of £10K of credit cards even at 0% and savings of £10K earning 3% then I guess you dont have any savings !!!!
You need to look on the debt free board and use Martin,s website to cut your spending or increase your income and build up savings not CC debts.
Rates have never been this low perhaps a long term fix or 5 years might be a good idea!

blueberrypie

Are you earning £80/month interest on the money that you are stoozing, the money that would otherwise be used to pay off the credit-cards? Will you continue to earn £80/month interest on it for the next however-many-years-your-mortgage-deal lasts?

If the answer to either of those questions is no, then you're losing more (in the extra £80/month on your mortgage payment) than you're gaining (from saving rather than paying off cards).

In your situation, even if there wasn't much difference either way, I'd pay off the cards and put the saved £80/month towards rebuilding savings.

GMS

Could you not pay off the bulk of the cards and keep back an emergency fund? The cards being on a 0% deal is irrelevant to the lender who will usually take 3% of the balance as a monthly committment.

Trackers are likely to rise so it may be worth considering a fixed rate but ultimately the choice is down to you and your attitude towards risk