Mortgage free 22 March 2014 at 8:11PM in Mortgage-free wannabe 1 reply 616 views

mikeydpippin

I,ve been doing some thinking, I have £10000 left on my mortgage and I am on the basic variable rate with Cheltenham and Gloucester would I benefit from paying off my mortgage with an interest free credit card, I appreciate there will be fees involved. But is there a saving. I am not too good at interest calculations Mike

abouttimetoo

Hi Mike, welcome to the board


There's a few things you should consider here

• Does your mortgage allow overpayments?
• What is your mortgage interest rate?
• Does your mortgage have an early repayment charge (ERC) (even if it does, doesn't necessarily stop you clearing it, you could leave a pound or two outstanding

More importantly how would your credit card provider treat this transaction (I'm assuming you have a credit limit to cover the £10k) If you are lucky (and you need to check with them direct) they might treat such a transaction as a normal purchase e.g in the same way they would treat you buying something in a supermarket.

On the other hand, they are more likely to treat this as a cash transaction in which case you would incur a one off handling fee, usually around 3 to 4 %

It's not unheard of for some card providers to treat such items as purchases and I've seen some on here do it albeit rarely but you need to really check the T&C's of your card provider first

Maybe the handling fee would be less than your mortgage rate in which case you might want to consider doing it

Another way might be to consider a 'slow stooze', you can find out more on the credit card thread or we can maybe help you here as we have members who have used the 0% on their card as a slow stooze to get rid of the mortgage more quickly/cheaper

Regards
ATT