Are "mortgage free wanabees" rethinking due to interest rates?

Petal88

chelseablue wrote: »

My mortgage interest rate is 1.49% and my credit card interest rate is 15%.


But..... I pay about £7 a month interest on my card balance but I'm guessing the interest on my mortgage is a lot more than 7 quid a month haha so still not sure what's best

Pay off the credit card Chelsea, it's a no brainer. As found on another page of MSE: http://www.moneysavingexpert.com/mortgages/mortgages-vs-savings

Where it says:

"A crucial rule of debt repayments is: clear the most expensive debts first. Do so and the interest doesn't build up as quickly, saving you cash and giving you more chance of clearing debts earlier. Therefore, as a rule of thumb...

- Clear high-interest credit cards and loans before overpaying your mortgage, as they're usually more expensive."

For every £100 you have on your credit card, you're paying £15 interest - compare this to the £1.49 you'd pay for £100 of mortgage debt.

SueP19

chelseablue wrote: »

My mortgage interest rate is 1.49% and my credit card interest rate is 15%.


But..... I pay about £7 a month interest on my card balance but I'm guessing the interest on my mortgage is a lot more than 7 quid a month haha so still not sure what's best

I would suggest you put both into http://www.whatsthecost.com/snowball.aspx

That way you can see how effective your payment will be in both, your interest on credit card at £7 per month must give you a balance of £500-£600, it depends on your disposable income to over pay too. If you had £200 per month available I would pay the credit card. At 3% minimum payment a month you will probably find it will take on average 40 years to even pay £500 off. :eek: