Commercial MFW any advice?

newsseller12

I have a commercial mortgage with RBOS over 15 yrs for 150k which I currently overpay by £200 per month which should bring the term down to around 12 years. The interest rate is 2.5% over base rate. Does anyone have any ideas to get this paid off quicker? Any overpayments can be taken back later if needed with 7 days notice. I am thinking of trying some credit card stoozing but instead of paying into a savings account putting it into my mortgage account and withdrawing when the interest free period ends.
My main bugbear is the interest cost of the loan (around 8.5%) and despite my business also being my home I cannot get the standard mortgage deals available

Kaz2904

Well with a rate like that it is clearly going to be better to overpay the mortgage than to fill your ISA!
Can you increase your income or the wage you take?
Will you ever be able to get a "normal" mortgage deal?
There were concerns about balance transfers not being as good now because of the fees but in your case they may be worth doing.
How will you repay the bt? Are you going to dump the whole thing in your mortgage and then use your normal monthly overpayment to pay the minimum and repay the balance by requesting your payment back? Or are you going to manage it differently? You need to assess this and weigh up which way is going to save you the most but also cost you the least.
I recommend going to www.whatsthecost.co.uk and playing around with some figures for some inspiration.
HTH, TTFN, Kaz.

newsseller12

thanks for your reply, Once I have paid my tax bill in the new year I am hopint to increase my overpayments to 350 pm, Unfortunatly I cannot have a residential mortgage as I have a shop and live above, I have enqiured about splitting the mortgage part business and part residential and have been told it is not possible unless anyone can advise otherwise.
As far as the BT is concerned I was going to make the minimum monthly repayments and at the end of the term take the payment back from the mortgage account. I have a good credit rating and no other debt.
I do a bit of eBaying but that is going towards our weding next summer.
Ideally I want to try and clear this debt in the next 6-7 years

Jonbvn

I assume that you claim the mortgage interest against tax?

Other than that, suggest you look for a remortgage at a better rate.

Finally, apart from emergency funds, you would be losing money if you save, since you will never get 8.5% after tax.

paulos1969

Sorry about the late reply - only just registered.

You could try re-mortgaging to an offset style commercial mortgage - Bank of Scotland have one.

You appear to be paying too much for your mortgage (though you don't mention how much it is valued at) - for low LTV loans the commercial banks will crawl over broken glass for you

newsseller12

thanks the property and businesss is valued at 250K and yes I do reclaim the interst against my tax