Overpay mortgage or pay 0% credit card.

Steameh

Morning all,

I'm 8 months deep into a 30 year mortgage and have around £4000 sat on a 0% credit card for 28 months. I'm always getting 0% offers through from my other credit card providers so shifting the debt around long term shouldn't be a problem.

I can afford to pay £150 a month on either the credit card or my mortgage. Current mortgage rate is 4% so obviously costing me a lot more than the credit card.

Which would you pay? I guess the obvious answer would be the mortgage, is there any reason I should pay the credit card instead?

Cheers

foxy-stoat

If you only ever plan on paying the minimum monthly payments on the £4000 until the next 0% shuffle and the next shuffle and the next shuffle then you should pay your £150 on your credit card as you will never clear the balance.


Once you have cleared the credit card after 26 months, over pay your mortgage.

Steameh

Well the plan was actually to pay £50 off the credit card and the other £100 off the mortgage, that way in 28 months, I'll have cleared £1400. Then transfer to another 0% and continue.

Sorry, should have mentioned that in the post.

indesisiv

Steameh wrote: »

Well the plan was actually to pay £50 off the credit card and the other £100 off the mortgage, that way in 28 months, I'll have cleared £1400. Then transfer to another 0% and continue.

Sorry, should have mentioned that in the post.

Plus the percentage balance transfer cost on each transfer. Probably around 1.5-2.5%??

Personally I would crack on with paying it all on the credit card then deal with the mortgage.

But you would need to do the sums around CC Balance minus payments then plus balance transfer fee. To get an actual cost.