What to do?

bazookajoe

Slightly off topic but I currently have a smallish mortgage of £36,000 on a property valued at £260,000. The mortgage has 14 years to run and is on a tracker rate. My current replayments are around £290 per month.
The mortgage package allows me to pay off what I want with no penalty fees and I can clear the mortgage as long as I leave one pound outstanding on the mortgage.

I currently have savings of £44,000 and was considering moving to a larger property but have found nothing that appeals to me.
I am currently adding to my savings at the rate of £800 per month.
I am coming out of my firms company car scheme and will be looking to buy a car valued at about £37,000.

Would I be better in clearing the mortgage and putting an £8,000 deposit on a car and taking out a car loan for about £29,000 at an interest rate of 7.1 percent over 3 years or should I use the £44,000 savings to purchase a vehicle outright for £37,000 and use the remaining funds to reduce the morgage to £29,000.

I really am struggling to work out which is the best way to go financially.

Thanks

LittleMissAspie

The mortgage rate is going to be much less than 7% so it would be silly to pay off the mortgage then borrow to buy a car.

The real MSE way would be to pay 35k off the mortgage then buy a 9k car.

dimbo61

What are you buying for £37K ??? You would be much better off buying a 6/9 months old vehicle with 2 1/2 years warranty left and in the current climate down sizing.
Do you really need a 3 litre diesel Jag when a 2 litre VW passat with a DSG gearbox would still give the right image and save you £15/18K
You need to keep a good savings pot just in case but you could increase your mortgage payment to clear the mortgage within say 5 years