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Mortgage vs Student Loan
neon_dannii
Posts: 63 Forumite
Hello
Just a question really, it says on MSE to always pay your mortgage over your student loan due to the interest difference, but what if you have a 0% interest mortgage?
I'm lucky enough to have parents who have bought me a house (£160k) and I'm currently paying them back monthly (for 25 years, all sorted via solicitor) interest free. I also have a student loan of £28k to pay back. (Post 1998)
If I want to overpay, or I come into some money, what would be best to do? Overpay mortgage to parents? Pay towards my student loan? Put money into savings?
Thanks
Just a question really, it says on MSE to always pay your mortgage over your student loan due to the interest difference, but what if you have a 0% interest mortgage?
I'm lucky enough to have parents who have bought me a house (£160k) and I'm currently paying them back monthly (for 25 years, all sorted via solicitor) interest free. I also have a student loan of £28k to pay back. (Post 1998)
If I want to overpay, or I come into some money, what would be best to do? Overpay mortgage to parents? Pay towards my student loan? Put money into savings?
Thanks
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Comments
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You'll still be better off by saving.MFiT-T3 :: Reduce mortgage to 80k (86.30%)0
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How much do you earn? Your student loan is deducted automatically from yoru salary. 28k before 1998?? that sounds awfully high. the interest rate on student loans is about 1.5% currently isnt it? By the sounds of it your in no rush to pay back the mortgage. You will get a higher return from savingTrainee Building Surveyor
DIP 12/02/13 - Mortgage application 13/02/13 - Valuation 14/02/13 - Valuation OK 22/02/13 - Mortgage offered 05/03/2013 - Completion 22/03/2013
FINALLY IN MY FIRST HOME!!! WAHOOOOOOO! :beer:0 -
How much do you earn? Your student loan is deducted automatically from yoru salary. 28k before 1998?? that sounds awfully high. the interest rate on student loans is about 1.5% currently isnt it? By the sounds of it your in no rush to pay back the mortgage. You will get a higher return from saving
After 2008, I graduated in 2010 from a 4 year course. Currently earn £22k, so paying back £46 a month at the moment, so not paying it back at any rate soon! And yeah the interest rate is about 1.5% as far as I'm aware...0 -
my suggestion would be to save the money and pay off the student loan in lump sums. Get a savings account with a higher interest rate than 1.5%.
in terms of the mortage was any overpayment cap agreed?Trainee Building Surveyor
DIP 12/02/13 - Mortgage application 13/02/13 - Valuation 14/02/13 - Valuation OK 22/02/13 - Mortgage offered 05/03/2013 - Completion 22/03/2013
FINALLY IN MY FIRST HOME!!! WAHOOOOOOO! :beer:0 -
If it's with his parents I doub't they'll penalise him for paying it back sooner!0
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Talk to your parents.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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