Personal Loan to Become Mortgage Free

DH and I have just done something scary but kind of exciting!! A couple of years ago we switched our mortgage to one that is completely flexible and we have been making substantial overpayments every month. Only problem being the because we have such a flexible mortgage the interest rate is not very competitive. We have now got our mortgage down to a level at which we can get a personal loan - and our own bank have offered us a 1 year fixed rate loan at 6.2% over 12 months - which is a much better rate than our current mortgage rate (6.91%)

The funds for the loan have just cleared in our account and we will be on the phone to our mortgage provider in the morning to get the figure for the final amount we owe (as interest is calculated daily - we had to wait until loan had cleared in our account before we could get the exact figure).

Soooo - in a couple of days we will be MF - albeit with a fairly large personal loan. However, with the improved rate and the security that this is fixed and will not go up over the life of the loan - we will be totally debt free in 12 months time!!! We have also thrown all our savings at this but with teh average mortgage rising by £100/month due to the 3 recent rate rises - it was a case of the sooner the better for us.

Just wanted to share with you that there are other ways of doing things and that a mortage doesnt always give the best rate.

Good Luck everyone...

xxx

Replies

  • MartinslovechildMartinslovechild Forumite
    1.6K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Forumite
    Good Thinking Deb.

    Well Done. :):)
    Mortgage Feb 2001 - £129,000
    Mortgage July 2007 - £0
    Original Mortgage Termination Date - Nov 2018
    Mortgage Interest saved - £63790.60
    ISA Profit since Jan 1st 2015 - 98.2% (updated 1 Dec 2020)
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