Would this be a mortage alternative

JimmyTheWig

TrickyDicky101 wrote: »

If you have £8k to pay off that is approx. balance (assuming repayment) over the term of £4k. At 4% interest rate (no idea what you are currently paying but probably not a million miles out) that would represent an interest charge of 4% x £4k * 18/12 = £240 interest.

Given the fee you will likely have to pay, this does not sound like much of a benefit to me.

With that low balance and time remaining, OP is likely to be on SVR.
Average SVR (according to MSE weekly email) is 4.9%. So that's £294 in interest.
MBNA are doing a money transfer 0% card with 1.94% fee. Don't compare this to an APR as you pay it on the full balance. So the fee would be £155.20.

So that's a nice profit locked in.
Plus, rather than paying the credit card back in 18 equal payments, if the OP just pays the minimum and keeps the rest in savings then there's the best part of another £200 to be made in interest.

Thrugelmir

Don't forget that they'll be a mortgage redemption fee when the account is closed. Amounts vary. Could be £125 to £250.

TrickyDicky101

JimmyTheWig wrote: »

With that low balance and time remaining, OP is likely to be on SVR.
Average SVR (according to MSE weekly email) is 4.9%. So that's £294 in interest.
MBNA are doing a money transfer 0% card with 1.94% fee. Don't compare this to an APR as you pay it on the full balance. So the fee would be £155.20.

So that's a nice profit locked in.
Plus, rather than paying the credit card back in 18 equal payments, if the OP just pays the minimum and keeps the rest in savings then there's the best part of another £200 to be made in interest.

Still seems a bit of a faff for not a great deal of profit/saving.

Maybe I've been living in Tricky's Ivory Tower for too long though?

ViolaLass

Thrugelmir wrote: »

Don't forget that they'll be a mortgage redemption fee when the account is closed. Amounts vary. Could be £125 to £250.

But presumably that would have to be paid at some point any way.

hcb42

There is also some satisfaction in being mortgage free _ even if the debt is still there !