Releasing Money in a Mortgage

Hi All,

A friend of mine has a house valued around 100k for which he paid £80k. At present he has around £40k left on a mortgage of 3.29%.

He wants to increase his mortgage to around £55k and use £9k of the additional mortgage to pay off a loan for which he is paying 9% interest on. He wants to use the final £6k to build up his savings at rates above 3.29%.

I was not sure what to advise as I didn't even feel it would be possible. I am very against the £6k being used for savings as it will be tricky beating the 3.29% interest rate he will be charged on this.

Has anyone any better advice than what I was able to provide? I feel that this is not a wise move on his part.
This discussion has been closed.
Latest MSE News and Guides

Boost your Nectar points

Get up to £25 in bonus points

MSE News

Ask an Expert: Scams

Watch MSE Katie's answers to your questions

MSE Forum

Hot Diamonds 40% off code

Including already-reduced outlet stock

MSE Deals