Add personal loan to mortgage?

missis_amber

My current fixed mortgage deals ends Dec 2015.
House value £150,000
Mortgage left to pay £83800
Length left on mortgage 26 years
Current rate 3.15%
LTV is just over 55%


I've found a fixed remortgage deal with my current provider at 2.39% fixed for five years. I have a broker looking into whether they can beat this.


I don't have any credit cards. I have one personal loan for £5000, which is at 8.5% interest and I pay £118 a month. The loan ends May 2019.


Is it sensible to add the loan to my mortgage? So take out a mortgage of £88,800, LTV would be 60%.


On the one hand it means that the loan is spread over 26 years but means that I can overpay my mortgage comfortably by £40 a month at a lower rate and probably pay it off quicker. According to the MSE calculator £40 extra a month would save me £4156 interest and I could pay the mortgage off 3 years and 3 months earlier.


I am sure I missing something here but not sure what!
Any guidance really appreciated.

amnblog

It is sensible find a 0% switch and then pay the debt off.


Avoid securing such debt against your home if you can.

missis_amber

Thank you. That's what the mortgage adviser said and I've just read the MSE guide which also says the same.

Thrugelmir

missis_amber wrote: »

On the one hand it means that the loan is spread over 26 years but means that I can overpay my mortgage comfortably by £40 a month at a lower rate and probably pay it off quicker.

That's what lots of people start out to do and never actually achieve. The unpredictable roller coaster of life tends to get in the way.

Interest rates will rise at some point. So don't base decisions that span the next 2 decades on current interest rate levels.