another equity loan question

freeflyer

I'm quite clueless about mortgages, interest etc etc it has to be said. I just do what the broker suggests when it comes to renewing my mortgage deal and thats about it really.

Anyway, I've got a *developer* based share equity, which is coming to the end of its 5 year interest free period.

• The value of the house was £125,000
• I put 10% deposit
• The developer put 10% .
• The mortgage is currently at 86,100.
• I have approx 10,500 saved up which i was going to use to pay off the 10% equity loan (obviously i'm not quite there).
• I did a new two year fixed mortgage in summer last year, currently repaying around £460 a month.

But i'm a little unsure what to do about the equity loan now.
Given the above figures, whats the best thing to do? I don't want to totally reduce my savings to zero, i'd like to keep a bit back, even if its only £1000.

1. Pay off part of the equity loan to the developer (perhaps £6-8k)
2. Put the developer loan onto the mortgage
3. put the £6-8k into the mortgage as overpayment.
4. Try and source the extra 2.5k and pay off the developer loan fully (assuming it is still at £12500, which i'm not currently sure of)

Any suggestions?