Credit Card Or Mortgage ?

Madcaine9

Hi, I am going to need to get my hand on £30,000 soon, I can do this with 5 credit cards that I have. I also have a mortgage with £85,000 equity in it so I would hope I could maybe borrow the £30,000 against this.
My question is what would be the best option for me, I mean pay the least interest. I am very confident I can pay this off in 5 years.
Thanks for any advice.

pinkdalek

You could borrow on your mortgage, typically lower APRs, however you may have to pay fees and the debt is secured against your home so you run the risk of being reposession should you default ( I am sure you wouldn't but you need to think that through) You can borrow on your mortgage and pay over 5 yrs too, you don't need to borrow over the term of your current mortgage.

Had you not considered an unsecured loan (max £25k) generally no fees, fixed interest rate, if you have good credit rating the rates are comaprable to a mortgage these days also. You could then put the rest on a credit card. Plus with the rate fixed on the loan you need not to worry about interest rate rises over the next 5 yrs. Most loans let you overpay if you wanted, some loan companies don't charge extra for this too.

Putting it all on a card may be more costly in the long term, you've no guarantee that there will be balance transfer deals available to every time, plus having that much on all you cards may hinder your chances of getting more credit in the future.

redpete

Credit cards will charge maybe 19+% interest, mortgage maybe 5%. Assuming you can get hold of that amount of money on either it seems straightforward. One question might be if you can't make overpayments on the mortgage which could mean you have to borrow for longer than necessary.

Tango130

£30,000 for the purpose of....

grumbler

madcaine9 wrote: »

...
My question is what would be the best option for me, I mean pay the least interest...

What sort of question is it?
You know the interest rates of your cards and your mortgage.

Depending on what you want (only you know this), for cards it can be higher rate for cash advances plus ~3% fee.

Madcaine9

pinkdalek wrote: »

You could borrow on your mortgage, typically lower APRs, however you may have to pay fees and the debt is secured against your home so you run the risk of being reposession should you default ( I am sure you wouldn't but you need to think that through) You can borrow on your mortgage and pay over 5 yrs too, you don't need to borrow over the term of your current mortgage.

Had you not considered an unsecured loan (max £25k) generally no fees, fixed interest rate, if you have good credit rating the rates are comaprable to a mortgage these days also. You could then put the rest on a credit card. Plus with the rate fixed on the loan you need not to worry about interest rate rises over the next 5 yrs. Most loans let you overpay if you wanted, some loan companies don't charge extra for this too.

Putting it all on a card may be more costly in the long term, you've no guarantee that there will be balance transfer deals available to every time, plus having that much on all you cards may hinder your chances of getting more credit in the future.

Thanks I hadn't thought about unsercured loan I will look into it

jonesMUFCforever

As soon as OP said ''I am confident I can payback within 5 years'' alarm bells rang out for me - I don't know why but anybody contemplating taking out £30k worth of credit card debt for something makes me wince.

g6jns_2

madcaine9 wrote: »

Hi, I am going to need to get my hand on £30,000 soon, I can do this with 5 credit cards that I have. I also have a mortgage with £85,000 equity in it so I would hope I could maybe borrow the £30,000 against this.
My question is what would be the best option for me, I mean pay the least interest. I am very confident I can pay this off in 5 years.
Thanks for any advice.

You would crazy to use the credit card route. Either try and get more on your mortgage or try getting a second one.

Thrugelmir

Tango130 wrote: »

£30,000 for the purpose of....

This is an important question that requires answering.

Madcaine9

jonesMUFCforever wrote: »

As soon as OP said ''I am confident I can payback within 5 years'' alarm bells rang out for me - I don't know why but anybody contemplating taking out £30k worth of credit card debt for something makes me wince.

Why does the fact I can pay the money back worry you, would it be better if I couldn't pay it back ?

I think I will go mortgage route it will take a little longer to sort out but will be one payment a month to make rather than 5

jonesMUFCforever

madcaine9 wrote: »

Why does the fact I can pay the money back worry you, would it be better if I couldn't pay it back ?

I think I will go mortgage route it will take a little longer to sort out but will be one payment a month to make rather than 5

You tell me what the minimum payments would be on 5 credit cards - do you think you would get 5 new ones all at once with a decent cash limit?
If not you would be paying eye watering interest rates on cards you already hold as they won't be 0 %
What is the money required for?
What salary are you on now? What is your present mortgage (not equity)?
If you got a loan for £25k (max for personal loan) what would the repayments be?

Next question I would ask is do you have any savings?
Would you use this instead of part of the loan required?

If you have no savings you must be utilising all your salary so how would you meet hundreds of pounds of repayments all of a sudden?

Questions questions questions.