Borrowing on my mortgage

Longarms

Hi all...first time I've posted here so a little unsure but have been a fan of Mr Lewis for many years so here goes...

I have a flexible mortgage with a very competitive 1.25% annual interest rate and about £25K of available funds that I can draw down without any hassle.

I currently owe £54K and am paying back £850 per month to be mortgage free in 5 years. But I also have £12K in credit card debt - £6K in an interest free a/c and the rest in a 16.9APR a/c. I want to reduce my monthly outgoings. Should I borrow on my mortgage to pay off my credit card debts? I really want to get rid of my mortgage but the interest rate is really good and it seems like a very cheap way to borrow. Advice please? Thanks.

Dave_Ham

Hi and welcome..

Firstly, great username. For some childish reason I found it funny..

Never mind, on point...

It depends on how long you would envisage paying off the credit card over?

It is obviously poor advice to move to a lower APR but one that would extend the term by x years and then be a lower APR but higher total repaid amount.

Given the numbers involved though and subject to you paying this off quickly, I would think it is a no brainer.

Remember again and its an obvious point that one is secured and one is unsecured debt...

And great rate....

kingstreet

Agree with DH.

Draw down the money and use it to pay off the expensive debt. Carry on paying as much as you were before so you benefit from the lower rate in the form of quicker repayment.

Don't just save money for the sake of spending it on something else. That's a false economy.

Longarms

Thanks Dave. My brothers used to call me Long Arms when I was a child because I could scratch my knee standing up straight! Still can...and no, I'm not some sort of chimpanzee!!

The issues you outline are the ones I've been thinking about. I'm really tempted to borrow on my mortgage because the rate is so good, but then I hesitate because of the risk of paying more in the longer term - and because of an inbuilt worry about increasing my mortgage. So working on trying to pay it off quicker. But that means I'll need to make a bigger mortgage payment and that doesn't help my desire to reduce my monthly outgoings. Still, short of a windfall without any attachments, I don't think there is another way. Appreciate your prompt response...

Longarms

Thanks kingstreet. Makes sense.

Dave_Ham

Bite the bullet I think as you say - good luck...

Oh and could not help myself, my hands are nowhere near my knees so even better username...

Brilliant!

Longarms

Wonder how many more people will be trying to scratch their knees standing up straight today?!! But it's true...I can do it!

Anyway, thanks again. I think biting the bullet...as I scratch my knee (!)...is the way to go.

opinions4u

Just tried. Close, but not close enough!

asandwhen

Nowhere near - I can just manage the top of my leg - although I have a long body.

Dave_Ham

Not sure what tomorrows challenge will be, although will be changing my user name to shortarms or I suppose sticking on the positives; longlegs

I am a mile off my knees..

sockpuppet

Hee Hee

This thread has just really cheered me up...!

(No! I cant reach my knees.....) :rotfl: