Where will my money be more effective?

darbydoo

Hi all. I'm after a bit of advice if I may.

I am now in a position to be able to save around £500 a month.

My goal is to sell my house, but I am in negative equity by around £10k. I'm not interested in buying another at this stage as we are considering emigrating, so I want to reduce any potential debt as much as possible.

Here's what I have:

I have a main mortgage with HSBC, which is £56k outstanding, tracker mortgage at just over 1% APR. No early repayment charges/ penalties for extra payments.

I then have a picture secured loan for £30k, which is around 9% APR (worst mistake of my life!). Not sure of the penalties on this one, but I suspect it's not pretty.

Finally I have an unsecured loan with Natwest for £6k at 9% APR. They charge 28 days interest on the extra payments.

So my question is, where am I best off throwing my money? I don't think it's the picture one as that will just be consumed by the interest, but not sure between the other two.

Can I even sell my house if the sale price doesn't cover the both secured loans as long as I can cover the shortfall with e.g. a top-up on the unsecured loan?


Help!

:beer:

CLAPTON

you need to find out the situation with the picture loan as that would be the obvious one to pay off first

darbydoo

I have spoken to picture. Basically, anything I pay, only around 15% of it will go towards capital as it's front-loaded with interest. So seems a bit of a waste when my overall goal is to reduce the actual balance (i.e. capital) on my mortgage. Have I got that right?