Loans to Make Mortgage Overpayments

Kynthia

Cotta wrote: »

Thanks for the responses folks, I am happy that what I am doing at present and making overpayments when I can is the best option.


Is 4.69% really a high rate?

It is compared to what people are getting at the moment. I fixed for 5 years at 3.14% and am half-way through my fixed term and people now are getting 2% if they have a decent LTV. I would look at whether remortgaging and paying the ERC would leave me better off but I fixed for a good reason as our income has dropped and our expenses are increased (having 2 children in that 5 years and both going part time and looking for new jobs) so once the fixed term ends we should be more settled.

Have you looked at what you could get if you remortgaged and whether it would save you money even after paying the ERC?

David_White

Cotta wrote: »

Is 4.69% really a high rate?

1) How long have you had this product for
2) What was the Loan to Value of your mortgage when you took out the product
3) Have you had any credit issues in the past 6 years

Cotta

David_White wrote: »

1) How long have you had this product for
2) What was the Loan to Value of your mortgage when you took out the product
3) Have you had any credit issues in the past 6 years

1) 3 years of a 5 year term.
2) I borrowed 88% of the property value.
3) No credit issues.

chelseablue

To me it sounds high for someone with no credit issues and over 10% deposit, our rate is currently 1.49%


But I cant remember what the market was like 3 years ago

nkkingston

If I were you I'd check the Ditch the Fix page to figure out whether remortgaging is cheaper than taking out an additional loan. Rates won't stay this low forever, and you may find when your current fix is up you're missed the opportunity to fix at 2% or less.

steampowered

If you can get a loan at a rate lower than 4.69%, you can take that loan and overpay the mortgage.

Your total debt is the same, but some of it would be on the loan, at a slightly lower interest rate, rather than on the mortgage.

This only works if you can get a very cheap personal loan. It might not be worth the bother to be honest.