Do you have to have a mortgage?

cheghead

Say you had just a few thousand left on your mortgage can you transfer the amount to a personal loan or credit card?

Al_Mac

Had some/all of my mortgage on credit cards since October 2002. You need to find a decent 0% that lets you transfer to your current account.


See Martin's article

:beer:

cheghead

So the answer is yes. When I have about £10,000 left I thought about transfering it to a personal loan on a fixed rate of say 5.8% over 3 years and then transfering this balance in the last 12/18 months to 0% credit cards.

Does this sound like a good idea?

davidcampbell

ive no idea cheghead if its a good idea or otherwise but whats your thinking behind this if you dont mind me asking?



(just curious)

DC

MarkyMarkD

The problem for most people is that the repayments on a personal loan for a particular amount are far higher than those on a mortgage, because the term is shorter. If you were in the last few years of a mortgage, it might (in theory) be worth doing it, but honestly you'd be unlikely to save very much.

The main people who could benefit are those who have lots of income compared to a mortgage they took out when they earned far less - but then why not just change the term of your mortgage?

cheghead

davidcampbell wrote:

ive no idea cheghead if its a good idea or otherwise but whats your thinking behind this if you dont mind me asking?



(just curious)

DC

Will have £25000 left to pay in Next few months and can change mortgage without any penalty. Will want to pay it off over 8-9 years. My thinking is to take a cashback fee-free deal which will give me £1500. Will then be on svr for 5 years. At end of that will owe approx 10k so wont be able to re-mortgage on such low amount. (Using current rates as an example) If interest rate is at current rate of 6.75% variable
1.then transfer to personal loan for 5.9% fixed until comes down to around 3-4k then bt this to couple of 0% credit cards (with no bt fees).
2. make overpayments then transfer to 0% cards as soon as possible depending on credit limit I can get.

If I take out a short or even long term fixed rate instead it will probably cost in fees and will still end up on svr unlikely to save more than £1500 in the long run!

MarkyMarkD

Not a bad strategy.

Whilst 6% cashback for 5 years paying SVR means an effective discount of 1.2% a year, which is a very long way short of what you can get, even on a no-fees deal, it is better than it appears as the 6% is of the whole loan, whilst the average balance over your 5 year tie period will be far lower than that.

So, good move!

cheghead

MarkyMarkD wrote:

Not a bad strategy.


So, good move!

Seemed to make sense to me. Obviously without a crystal ball on interest rates can't guarantee. But think I'll go for it. Gonna go to the Chelsea B. S. unless any1 knows a better cashback deal with no fees at all?

MarkyMarkD

When you say no fees at all, you do mean that legal costs are included, do you? Otherwise you could have an unpleasant surprise.

andy88_2

I read a suggestion some time ago that it's a good idea not to pay it off in full. Leave a couple of hundred quid. That way the deeds are securely stored for free. I don't know if this is still true

cheghead

MarkyMarkD wrote:

When you say no fees at all, you do mean that legal costs are included, do you? Otherwise you could have an unpleasant surprise.

The Chelsea cashback costs nothing to set up. No admin fees. No legal fees. Free valuation. You can apply up to 6 months before you want a mortgage and they will give you a decision very quickly. Even if you change your mind it still won't cost you anything,