Pay off mortgage with loan?

edited 22 July 2016 at 11:40AM in Mortgage-Free Wannabe
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FisaplisapFisaplisap Forumite
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edited 22 July 2016 at 11:40AM in Mortgage-Free Wannabe
Any advice welcome- we are lucky enough to have got our mortgage to under 20K as we stayed on the mortgage company's standard rate (4.74%) but it meant we could overpay without incurring penalties. It appears it's not worth trying to remortgage for the remaining amount (or another mortgage provider won't for 20K.)
There are loans for up to 20K kicking about at 3.2% (thanks MSE for the info!) On the face of it, it seems a no brainer that the loan APR is a lower value but not sure if it actually will work out cheaper. And if we could overpay on the loan as we've been able to do on the mortgage.
Should we try for a loan to pay off the mortgage then pay off the loan?
Just any thoughts would be great!

Replies

  • edinburgheredinburgher Forumite
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    How long would it take you to pay off the loan? Is it even worth it for the timescales involved? Might an alternative be 0% money transfers on credit cards that charge a fee for the transfer? For example, my V1rgin [email protected] credit card was offering me a rate of 2% for a year for similar...
  • freshcottonfreshcotton Forumite
    223 Posts
    It's certainly worth an enquiry. If you can get a better rate and can overpay on the loan, then there is a saving to be made. Subject to any admin costs
    Mortgage Start - August 2013 £145,000 ************ Balance at April 2017 - £59,000

    Target - Overpay by £2,500 each month ************** Mortgage free by December 2018!
  • Thanks Edinburgher. As it stands we are overpaying a little each month and we'll pay the mortgage off in about 6.5 years. But hoping to do a lot sooner (!) as we'll put some bigger overpayments in when some ISAs etc mature. I suppose I have to check what the loan period is. I think I'm just hoping for a quick "if you get a loan you'll pay X, if you stay with your mortgage pay X'- Fly Fifer!
  • beanieloubeanielou Forumite
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    Fly Fifer's are ace!!!!
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~**
    MFW. Finally mortgage free February 2021****
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    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
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