New Loan to Pay Part of Mortgage?

Trents

I currently have an interest only mortgage and pay overpayments to the tune of what a repayment mortgage would cost. The interest rate on the mortgage is 4.78%. I still have 15 years mortgage term left.


I could take out a loan of up to £25000 at 3.8% if desired.


My question is this. If I took out the £25000 loan(over say 7 years) and paid that straight off the mortgage, would the total repayable(loan+mortgage) be less overall as that £25000 would be payable at the lower rate? I understand the monthly repayments will be higher while paying both the loans off at the same time but I guess I could reduce the overpayment amount in this case.

getmore4less

Why not get all the debt onto a lower rate by changing mortgage product.

AnotherJoe

getmore4less wrote: »

Why not get all the debt onto a lower rate by changing mortgage product.

^^^^^^^ This

Debtslayer

What above posters have said
Change to repayment mortgage