Mortgage advice.... take another fixed rate or personal loan??

elwistua

Hi all,

Just looking for some advice.

We are coming to the end of a 5 year fixed rate and will revert to Barclays SVR of 4.14% in January 2019 so obviously don't want to go in to the SVR rate. If we saw out our mortgage term there would be 2 years and 3 months left at the end of December.

Anticipated balance at end of December 2018 = £13,800

We want to (and can afford to) pay off the remaining mortgage by end of December 2019.

We have a booked a meeting with a Barclays mortgage advisor and are looking to take on a 1 year fix with change the repayment term to 1 year. Conflicting conversations with Barclays about whether they will change the repayment term on a new deal so hence a meeting with and advisor. The 1 year Barclays fix is 1.96% with no fee.

Our other option is to take out a personal loan over 12 months and pay off the mortgage.

What advice would you have on either option and are there any drawbacks in paying the mortgage off.

Once the mortgage is paid off we will be saving what we would have been paying every month into an isa/savings. At this point we don't anticipate moving house for a number of years although we will in the next 10-15 years.

Thanks for any advice.

Thrugelmir

elwistua wrote: »

Our other option is to take out a personal loan over 12 months and pay off the mortgage.

At what interest rate?

elwistua

Hi,

The loan is 2.7%. Obviously higher than the mortgage rate but would achieve the MF timescale we are looking for.

KnowledgeIsLife

Have you asked them what tracker rates are available as opposed to fixed yeah they rise with the base rate but would avoid any ercs if you redeem early

elwistua

KnowledgeIsLife wrote: »

Have you asked them what tracker rates are available as opposed to fixed yeah they rise with the base rate but would avoid any ercs if you redeem early

As yet I haven't and hadn't thought of this as an option, we have had fixed rate mortgages for about 10 years so tend to only focus on fixes.

obay

Could you try and get a few 0% credit cards to clear the balance? wouldn't it be a better idea? The last 14k on 0%... clear it off within the next 24 or so months and save a bundle of interest, would that be an option?

I think you'd need a balance transfer card that will go into your account then you can pay the mortgage if I am mistaken, please tell me.

Thrugelmir

obay wrote: »

I think you'd need a balance transfer card that will go into your account then you can pay the mortgage if I am mistaken, please tell me.

Not possible to draw cash on a balance transfer card. The transfer has to be made to another credit card account. The upfront fee is often 3% of the amount advanced therefore not particularly cost effective either. For short term borrowing.

Neutrinno

Thrugelmir wrote: »

Not possible to draw cash on a balance transfer card. The transfer has to be made to another credit card account. The upfront fee is often 3% of the amount advanced therefore not particularly cost effective either. For short term borrowing.

They could consider money transfer options @ 0% if they could find low fee deals. I'm sure there are competitive options.

Thrugelmir

Neutrinno wrote: »

They could consider money transfer options @ 0% if they could find low fee deals. I'm sure there are competitive options.

In the context of a borrowing requirement of over £13k. The market is undergoing change following the FCA's rules to tackle those people in persitant debt. There's around 3 million 0% accounts currently open. In an enviroment of squeezed lending margins unlikely that lenders are going to offer gift horses.

getmore4less

0%spend card max out normal spends and overpay the mortgage is often the cheapest way to clear small mortgages.

There must still be SBT cards that alow transfer to bank accounts, the fees make them more expensive.

Mutton_Geoff

I had a 3 year fixed rate with Barclays but didn’t want to move to SVR nor remortgage as I planned to move within two years. I discovered Barclays have a scheme where you can appeal for an extension, and seemingly they must give it to you. It’s really aimed at people who would experience hardship or inability to pay if moved onto their SVR and you have to fill in a long budget form.

Mine showed I had plenty of ability to pay new rates but they still extended my deal for a year. After that year, I went through the process again and got a second year. During that period I sold the house and moved, new house, new lender.

This was in 2015 so I am sure this scheme is still running although lenders probably don’t want to shout about it too much. I forget the name of the process but if you call Barclays, ask their mortgage team about an extension as you can’t afford the new rate nor arrangement fee and see what they say.