Pay extra off my debts or the mortgage????

Jules

I currently have £2175 saved up to pay a lump sum off my mortgage next month (its interest only and no endowment and only 7½ years to run). I am planning to pay off £3000 each Sept just before the statement date as this is the time they apply any capital payments to the account.

I am also hoping to have around £600 on top of this gathered by the end of August but I can't make up my mind what to do with it (never thought I would have this problem!!!).

I want to get my debt cleared ASAP but at the minute the only debt I pay any interest on is the mortgage, the rest is all frozen.

Part of me wants to pay the £600 off the mortgage as its interest bearing, but another part wants to start chipping away at the other debts. My smallest one is for £898 with barclaycard and I was thinking of offering a full and final on it. I was going to start at 45% and work up to a max of 70% at a push.

What would you do? Mortgage or Barclaycard? Or would you save it for a rainy day?

Thanks

Jules

RAS

Are you paying the minimum on the barclaycard?

Hpow much is still owing on the mortgage?

When do your 0% deals come to an end?

Jules

RAS wrote: »

Are you paying the minimum on the barclaycard?

Hpow much is still owing on the mortgage?

When do your 0% deals come to an end?

I'm on a DMP with the CCCS and have been since 2004, so all the interest is frozen now, so no actual 0% deals, thay all have agreed to freeze the interest so long as I keep up the reduced payments. I pay £8.46 per month on the barclaycard one and have worked out it will take 106 months to clear!!! Hence wanting to negociate full and finals.

The mortgage has £19,846 and I have 2 small home improvement loans one £2871 which is interest only and the other £2361 which is repayment. All on a 6.6% tracker, which I know isn't the cheapest but because of my DMP situation and the fact I owe less than 50K on the mortgage the deals available to me are worse than my current rate!

I know it makes sense to pay off the mortgage but it would be a psychological boost to start paying off some of the unsecured debt even though there is no interest on it.

Just to add: 3 years ago I hadn't a penny to my name and its only through careful budgetting and working extra that i now have this extra money to pay off. If you are just starting out on the DFW road, there is light at the end of the tunnel and you will get there.

Jules

RAS

Hi

Are there rules about how you use extra money in a DMP??