Anyone good with numbers and %'s

cal70

Hi guys,

Anyone good with numbers?

I have overall debt of approx £73k left on my mortgage, split three ways

1. Mortgage at 4.78%(approx £64k) 2. Secured loan at 6.79% (approx £8k) and 3. An Unsecured loan at 4.78%(approx 1k) I'm selling my little flat for £84.5k at the end of May.

I have just received an offer from barclaycard to transfer money into my account for a one off fee of 1.9%, as long as I pay it off by next feb which I could afford to do from my salary, the money would be in my account in a day or so. I was thinking of taking out 2k at the 1.9% fee and putting it towards my mortgage now before I conclude the sale of my flat at the end of May.

On my logic my mortgage will be reduced before the sale and I'll get the extra back on the sale for a cost of £38 for borrowing £2k but I don't know if I'm thinking this through properly.

Can anyone advise?

Thanks.

Cornucopia

Presumably only the main mortgage is flexible enough to be part-paid with your £2k advance?

Probably worth doing, though next Feb is not even a year, so the 1.9% is more like 2.3% when pro-rata'd to an annual equivalent.

The other consideration is the monthly payments. If you cleared the £1k Unsecured Loan, would that free up cash each month that could then overpay the Mortgage?

Whatever you do it's not going to be a huge benefit, so if it makes you uncomfortable, I would leave it.

cal70

Thx for the reply..

I think my logic may be off on this that's why I started this thread...I can pay to each part , ie mortgage, secured and unsecured or to any single element individually, but because the sale concludes at the end of May, I thought because I was only paying £38 to borrow £2k it might be beneficial, I think I'm getting myself confused.

amnblog

Don't borrow on credit cards (short term debt) to pay off mortgages (long term debt).

Cornucopia

cal70 wrote: »

... the sale concludes at the end of May...

It definitely doesn't work over a period of a month, and it's likely to confuse matters with the settlement of the loans if you make additional payments at this late stage.

Unlike amnblog, I don't think there is anything intrinsically wrong with transferring debt from a Mortgage to a Credit Card, as long as the rates, payment terms and affordability are right.