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!

Need to go to repayment - backed into a corner

Hey I'm new on here and I have been thinking about posting for some time ..here goes

We are on interest only mortgage £202k and 16 years left - can just about afford 100% repayment (Santander) but will be a squeeze nonetheless it has to happen!

My question is that I have £8k credit card debt but £6k share plan so do I

A) pay off cc and remain with Santander
B) pay £6k off capital and move to First Direct who can offer better rate
C) keep share plan and pay cc (which are on 0% interest until next year) and try for small overpayments to get my capital down with Santander?

Feel this is a simple question but struggling with it in my head hence posted!

Any thoughts? :mad:

Comments

  • silvercar
    silvercar Posts: 49,934 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    If money is tight I would make overpayments on the interest only mortgage rather than change to repayment. That way you don't hit trouble if you can't afford the repayments at any point.

    No point paying cc if the interest is currently 0%, better to make a regular savings account (which will gain you some interest) until the 0% runs out, then clear the balance.

    Are there benefits to keeping the share plan going? If so keep it running. Does depend on the underlying share price though.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • amnblog
    amnblog Posts: 12,768 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Depends on the potential of the share plan surely?

    As SC says, overpay Santander rather than getting into contracted full repayment contract.

    That way you get the same effect with flexibility if things do get tough.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, 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.
  • Let_Us_See
    Let_Us_See Posts: 1,319 Forumite
    I would have thought a realistic repayment vehicle is your main priority or change to full repayment? Basically, an interest only mortgage is not a replacement for an unaffordable capital and interest repayment mortgage, and somehow you have still managed to rack up £8,000 of credit card debt - the fact it is 0% interest makes no differernce - the debt is still there.

    Rethink your finance and plan to transfer to a repayment mortgage ASAP.
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
  • 352.1K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.7K Mortgages, Homes & Bills
  • 177.5K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K 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.