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paul24dual
Posts: 9 Forumite
I'm looking for some advise what to do.
This is my current situation
Left on mortgage - £72000 (1.74% interest) - £378 per month – 19 years
Left on current account - £12500 (4.99% interest) - £100 per month
Left on loan - £4000 (5% interest) - £475 per month – 7 months left
With the news that interest rates going up maybe early next year would i be better to swop to a 5 year deal ( best i have found is 2.89%)?
I'm kinda of in a position where i think it would be nice to have all the debts in one place and be able to start a savings account but then i don't want to pay more interest. :eek:
your opinions would be great
This is my current situation
Left on mortgage - £72000 (1.74% interest) - £378 per month – 19 years
Left on current account - £12500 (4.99% interest) - £100 per month
Left on loan - £4000 (5% interest) - £475 per month – 7 months left
With the news that interest rates going up maybe early next year would i be better to swop to a 5 year deal ( best i have found is 2.89%)?
I'm kinda of in a position where i think it would be nice to have all the debts in one place and be able to start a savings account but then i don't want to pay more interest. :eek:
your opinions would be great
0
Comments
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What terms are your 1.74% rate on? If it's a lifetime tracker, you'd be mad to change it. The 2.89% rate will cost you an extra £828 interest per year (decreasing over time) and will revert to something much higher than 1.74%.
What I'd do is pay off the £4000 loan and leave £8500 in savings. Then set up a standing order of £475 per month to overpay your mortgage (the money you currently pay towards the loan).
Doing this would decrease the term to less than 8 years. By the time any significant interest rate rises come about, your capital will be significantly lower and the impact of rate rises will be much lower.0 -
Oops, sorry the current account is a £12,500 debt. Its called a reserve with Barclays.
Also it is a lifetime tracker with barclays. 1.24% + (BBBR + 0.50%)
What do you think?0 -
Keep the lifetime tracker and try and overpay the other debts first.0
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Keep the lifetime tracker.
Work on reducing your loan and reserve.0 -
Check your T&C some have the option to change to offset for a fee and a small increase in rate, this might bring th reserve onto the mortgage rate.
As other have said keep the great rate tracker and kill the loan/reserve with excess cash.
Left on loan - £4000 (5% interest) - £475 per month – 7 months left
7*£475 = £3325!0
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