Mortgage free, cheaper personal loan rates?

Markyst

Hi forum , at long last I'm almost mortgage-free. It took me longer than it should have due to being in an endowment type for the first 15ish years before managing to switch to repayment, which took me to a 30ish years overall mortgage.

Only blot in my finances is about £18k outstanding on credit cards, mostly spending on home as did a self-build when switching mortgage.

May not have been the best decision financially in hindsight, but I overpaid the mortgage by quite a significant (pre-agreed) amount to be mortgage-free sooner, where I was card swapping interest free transfers and paying the minimum amount. The CC outstanding amount was a lot higher years ago, now reduced, but could have been by more.

So next month, one card's interest free transfer is coming to an end, but the other card has none available, and if I do nothing I'll be hit with 20% interest rates.

I've just spoken to my mortgage provider, and I can pay the next 1.5 months payment this week without any early repayment fees.

I'm thinking of then applying for a 2 year personal loan for the outstanding cc debts, Thinking that I'll get a more favourable response & rate if I'm mortgate free, would that be correct?

I'm now 60 years old and in good health & full time employment which I won't be leaving for at least another 2 to 3 years when the wife will be retiring.

So after all that, my question is, is it worth me paying off mortgage early to apply for a loan in a "mortgage-free" state, or would I not get any better offers and might as well leave mortgage as is?

Thanks in advance.

sparklep0ny

It's unlikely to make a difference.

[Deleted User]

The main problem you'll have is that you'll have £36k of unsecured borrowing, which is a lot, even if your income is approaching 6 figures.

If you're shortly going to be mortgage free, throw all your newly spare cash at the credit cards. Also look at BTing any interest bearing debt. 

mikrt

Thanks @Deleted_User but as mentioned other card isn't offering balance transfers any more, and I'm not intending getting another card.

Won't I just have £18k unsecured debt as the loan will be paying off the original card debt instantly, don't lenders take that into account when I tick consolidation as reason for loan? 

Anyway, I've already decided to get a personal loan, just trying to find out if it's worth paying off the mortgage first, and it seems to be unlikely thanks to @sparklep0ny

[Deleted User]

No, you'll have 36k as you need to borrow the second 18k before you pay off the first.

Lenders know there's a good chance you'll just run up further debt.

It's a shame you've decided against the cheaper, lower risk approach of a BT.

femalemonarchfemalecanine

I'm nearly 60, mortgage free, got £11,000 on 0% credit cards and just got a loan at 2.9% of £15,000 
My income is £28,500 net per year. I've never missed a payment of anything, but am still getting 0% offers.
good luck!

Markyst

Deleted_User said:

No, you'll have 36k as you need to borrow the second 18k before you pay off the first.

Lenders know there's a good chance you'll just run up further debt.

It's a shame you've decided against the cheaper, lower risk approach of a BT.

@Deleted_User, you keep mentioning BT. Do you think I'd get accepted for a new card for that amount? I'm doubtful, but very happy to be corrected.

@femalemonarchfemalecanine, Can I ask, are you mortgage free, and who your loan is with?

Thanks both.

[Deleted User]

You won't get one for that amount, but you don't need to. You would just shift what you can (and any further cards), and focus on the interest bearing debt, meaning your overall limits will be far better managed than your proposal to double your debt, making you lower risk and opening up other options.

If you can't get a BT card, you won't get a loan. But if you won't get another card to reduce the interest, it's all moot anyway and you'll just need to pay the standard APRs.

femalemonarchfemalecanine

Markyst said:

@femalemonarchfemalecanine, Can I ask, are you mortgage free, and who your loan is with?

Thanks both.

I am mortgage free and the loan is Nationwide [who I have a current account with]