Seeking Advice Please

MFWunsure

Thank you for all of the responses.
Our current fixed rate has just come to an end and I received the letter yesterday that we are moving to Santander SVR of 4.740% which prompted my post following debate with hubby. I think our remaining term is around 9 years but we do overpay so was looking to clear this in around 5-6 years.
Our savings are in a Santander 123 current account so receiving 3% over £20K not sure what we get on the remainder. All our money is in this one account so use this day to day also.
Hubby just in the higher rate band for tax, I am in the lower band.
When we re-mortgaged 3 years ago I did look into offsets at that time and the horrendous fees put me off. I've just run a calculator on the First Direct website and it said there is nothing to suit my needs but to call so perhaps the amount I require is not high enough for them to bother with us.
I've looked for the best value personal loan using this site and M&S offer 3.6% so the interest cost over 2 years would be £280. We also pay £18 per month for redundancy protection and £15 per month for decreasing term life insurance to pay off the mortgage should one of us die. This I would expect would more than cover PPI on a loan of £7500.
My mind is made up that I want to go for the loan as I would be happy with that as a fall back and it is less than £30 per month than we will be paying on the SVR mortgage. I can then immediately start building our savings again.
Just to work on hubby now and its not often he puts his foot down with me and says no. As you have probably gathered I run the household money but I wouldn't say that I wear the trousers in the relationship.
Thanks once again for all of the responses, your time and advice given is very much appreciated.

edinburgher

My mind is made up that I want to go for the loan as I would be happy with that as a fall back and it is less than £30 per month than we will be paying on the SVR mortgage

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But if you borrow money to pay off a debt, you're in the exactly the same position you started in, bar saving a few pounds!

If you're going to do that, why don't you consider re-mortgaging to a mortgage that allows fully flexible overpayments? That way you could re-mortgage at 2.x% and OP loads every month, keeping your savings. If you take out a loan, you will be 1.x% a year worse off and you won't even gain the security of owning your own home free and clear.

Please think about this carefully before committing yourself, you're in a good position and don't want to squander this by opting for something that doesn't make sense using your own figures

Ps. Santander appear to have no ERC mortgages starting at about 2%

M0ney

Personally I think you'd be crazy to take a loan out, why not just pay off £19,000 and leave yourselves with £5,000 on the mortgage and then pay off around £500/month and your mortgage would be gone in one year and you'd probably still be left with £5,000 savings in the bank if you were careful financially over the next year.

MFWunsure

To update everyone hubby informed his father of our intention/dilemma today during their weekly game of golf.
Father in law hates any kind of borrowing being old school and has made his feeling clear on what he says is my 'hair brained scheme.'
Suffice to say hubby is standing firm on the wants to pay off the whole mortgage and wipe out our savings.
Father in law has said should any ill befall us or the kids and we are short of money then he would be willing to help us out with a loan.
Hubby has therefore won out as I've agreed to this and fingers crossed we will not be in the position that we need that help.
I intend to bank our mortgage payment and tighten our belts to save the same or more again and hope to feel financially secure again in a couple of years.
Not sure that I'm happy with this as I haven't got my own way and will feel penniless but time flies and I realise we are in a good position to be able to be mortgage free.