Mortgage with unsecured loan !

kiffab

Hi

I have a mortgage consisting of a secured loan and unsecured loan. There is 20 years remainining with a balance of 61000 (secured) and 11000 (unsecured).

I currently pay £394 (secured) and 73 (unsecured) each month (standard VBR of 4.78%). I've noticed the unsecured loan has barely gone down and I think all I'm really doing is paying off interest. :mad:

I'd like to deal with the unsecured part separately in order to get the costs down. Happy to pay more per month if it reduces the ££ wasted on interest.

What's the best way to go about this? Should I be looking at credit cards or a personal loan over, say, 5 years?

Feedback much appreciated!

Thrugelmir

What terms and interest rate are you on with your current mortgage and unsecured loan?

Are you allowed to make overpayments to the unsecured element?

kiffab

Thrugelmir wrote: »

What terms and interest rate are you on with your current mortgage and unsecured loan?

Are you allowed to make overpayments to the unsecured element?

The unsecured loan is part of the mortgage with the same company (NRAM) so I have just assumed the interest rate for both are the same? It was fixed but is now on the standard variable rate.

I called yesterday and they said I could take this out as a separate loan with them, paying that part over 5 years instead. £211 a month at 4.78% they said.

I could even pay off £1-2 K using savings if that's worth doing, to reduce the sum owed.

Thanks.

Thrugelmir

As the debt is with NRAM then they'll allow unlimited overpayments. So repay what you can, when you can to reduce the balance owed. Both mortgage interest and loan interest is charged monthly. So the effect of overpaying will become noticeable over time.

No point in borrowing elsewhere as you won't obtain rates as low as you already have.