We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Options for Mortgage <5 Years To Go

We're in the fortunate position of being on target to pay off our mortgage in just under 4 years. The amount outstanding at the end of last year was £17.5k. Unfortunately as a result of bad financial advise in the late 80's we converted our original repayment mortgage to an intrest only/endowment. This is has been sorted now and we are back on a repayment but as we had such a short time left it was only converting the intrest only mortgage to an SVR. The SVR is now 7.39% which when reading through the intrest rates available for fixed term loans seems a lot. My question is should I leave things as they are or look into taking out a cheap loan to pay off the mortgage? Probably a stupid question with an obvious answer but I don't know what it is.
TIA

Comments

  • Ian_W
    Ian_W Posts: 3,778 Forumite
    Part of the Furniture 1,000 Posts Photogenic
    I'd have a read of the banking and loans section of the site. But just to give you an idea of costs a loan of £17.5k over 48 months with the AA has repayments of £415 a month at 6.2% apr without payment protection.
    Quote at:
    http://theaa.com/finance/finance_quote.jsp
    A loan from Nationwide at 6.7% for some reason works out about the same even though their APR is shown as 6.7%
    https://www.nationwide.co.uk/loans/quick-quote.htm?type=2&fromWhere=Calculate

    You may find that because of the short time/small amount left the savings are not that great when you factor in that there may be a charge from your lender for closing the mortgage account and releasing the legal charge on your property. If that seems high - read up about Bank Charges as you may be able to challenge it.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.5K Banking & Borrowing
  • 253.7K Reduce Debt & Boost Income
  • 454.5K Spending & Discounts
  • 245.5K Work, Benefits & Business
  • 601.5K Mortgages, Homes & Bills
  • 177.6K Life & Family
  • 259.5K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 37.7K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.