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Pay off loan or put towards deposit
KierNet
Posts: 2,779
Forumite
Morning MSE,
I'm in the progress of saving for a house with my girlfriend. I've currently got a loan with Tesco that ends in October/November time 2020.
We've given ourselves a target of 18 months before we start looking for a house. We should have around £11k each if things go to plan.
I need a bit of advice with my loan. Its around £215 a month. Is it worth paying off earlier (I start a new job in two weeks time with a nice pay rise) or saving the money and sticking it towards my deposit?
I'm leaning towards paying it off earlier, as it should allow me to borrow more for our mortgage.
I'm in the progress of saving for a house with my girlfriend. I've currently got a loan with Tesco that ends in October/November time 2020.
We've given ourselves a target of 18 months before we start looking for a house. We should have around £11k each if things go to plan.
I need a bit of advice with my loan. Its around £215 a month. Is it worth paying off earlier (I start a new job in two weeks time with a nice pay rise) or saving the money and sticking it towards my deposit?
I'm leaning towards paying it off earlier, as it should allow me to borrow more for our mortgage.
What is pi? Where did it come from?
0
Comments
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If it's a higher rate than your savings are earning, clear it now and rebuild.
It would also be factored into affordability if you're carrying debt.0 -
I take it that if you and your girlfriend are first time buyers you are also making sure that you maximise what you can put into a HTB ISA or LISA?
Agree also that the loan needs looking at with a view to future affordability for mortgage applications - it could be worth perhaps visiting a broker to have a chat about how they feel it would affect you as things stand now - then you can take an educated view on whether to clear it, or not?🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25
Balance as at 31/08/25 = £ 95,450.00. Balance as at 31/12/25 = £ 91,100.00
SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0
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