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New Loan to Pay Part of Mortgage?
Trents
Posts: 3 Newbie
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.
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.
0
Comments
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Why not get all the debt onto a lower rate by changing mortgage product.0
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getmore4less wrote: »Why not get all the debt onto a lower rate by changing mortgage product.
^^^^^^^ This0 -
What above posters have said
Change to repayment mortgageCurrent Mortgage 01.10.17 £113,513.88
MFW Start Mortgage: £114,794.64
Current MED: 2036:eek: Target MED: 2026
Overpayment Target for remainder of 2017: £2,000
Mortgage overpayment savings: £684.80
MFW No 124 :money:0
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