Robbing peter to pay paul? solution - maybe

molly73

My IFA has just suggested that I switch my repayment mortgage to interest only this would save me £150 a month for a year to pay back credit card debts.

Is this a good solution? I think so
:beer:

roswell

and instad of your mortgage going down by £150 a month it sits at a stand still .. you forget or cant afford to back to repayment mortgage next year due ti interest rates .. one morning you wake up find you still owe X thousands on the mortgage .. your 65 and just retired ... time to sell the hosue ?

CLAPTON

whether it makes sense depends upon several things

have you addressed the reasons for the credit card debts so they won't simply build up again.

what interest rates are you paying on these debts at the moment.

how long will it take to pay off the debts with the extra 150?

but if you are paying high interest rates on the cards and you are sure you will use the money to pay off the CC and then return to a repayment mortgage then it is a viable alternative

dc

Maybe an increase in mortgage to pay off the high interest debt would be better, of course if the option is open.

phoebemar

Become a credit card tart but commit to a standing order. I have been doing it for years and I'm nearly there. (Debt free that is.)

omg_3

Your IFA's suggestion is a good one if you are paying CC int rate over 8%. BUT you must be vary careful. If you continue to overspend, you will end up with bigger problems. I suggest you look at the Debt Free Wannabee thread first

molly73

Thank you for everyones comments.

I understand that my mortgage interest rate will stay at my new fixed rate whether its repayment or interst only - will get IFA to Double double check.

I have addressed my issue on why I came into debt in the first place (husband self employed not earning enough and me having a baby and not working) This you will all say - aaahh - puck - husband has now got a decent job and Im working part time (childcare is nearly half of wages though) but I am waiting on first commission for candidates I have placed!! yipee will go on more bills - darn !

Martinslovechild

It's certainly a good idea to pay off more expensive debts first. If I were you though, i'd also be cutting up the credit cards to ensure that I don't end up in a worse mess in 12 months time!!