What do i do , I have some cash to pay part mortgage off?

photome

I have one loan for about £59000 ..54000 interest only and 5000 repayment with 7 years to run and is on a tracker at 1% above base rate. repayments are £133 a month. (i have been paying about £400 until just recentley after a fixed deal finished)

The other has £5500 outstanding with 13 years to run..variable rate at the mo is 4.99% and £47.

I have £45000 to use to pay off or invest?

My thoughts were to pay off the £5500 which saves £47 a month

Then use the rest to pay off £39500 of the interest only part which would leave 14500 on interest only and 5000 repayment at 1.5%..repayments would be £85 a month

I would then have to put x amount into maybe a yearly saver (prob £300 a month) for 3 to 4 years which would pay off the interest only.

Anyone have any better ideas

PS should I have put all those figures on a chat forum? If not I will delete

vacheron

I'd pay off the 4.99% loan completely but don't touch or overpay the 1% above base loan, instead open and fill a cash ISA (or two if you're a couple) paying > 1.5% and put the remainder into an instant access savings account paying > 1.5% after tax. You'll actually make money that way.

Just make sure to keep an eye on the respective rates in case the situation changes.

photome

Does anyone else have an opinion

I have senn a financial advisor

She said that normnally she would advise paying off as much of the mortgage as possible but as my repayment interest is low and I could get more by investing she wasnt so sure!

getmore4less

photome wrote: »

Does anyone else have an opinion

I have senn a financial advisor

She said that normnally she would advise paying off as much of the mortgage as possible but as my repayment interest is low and I could get more by investing she wasnt so sure!

Get a new advisor

pay of 4.99%

Invest at net(after tax) somewhere that is higher than base+1%

save an extra £107pm to cover the shortfall

We run money through regular savers and ISAs.
Instant access over 2.5% are avaialble
Tracker savings mean you follow the mortgage rate.

Do you have any plans to move? check the portability

I would look to see if they would extend the term on your current base+1%