Robbing Peter to pay Paul?

glastowinebar

Could anyone tell me what the interest rates are on an average overdraft?

In a couple of weeks time I will be paying in the surrender value of my endowment which will bring my mortgage down to £9000, which I will pay off in three years.

I have an overdraft facility of £5000, would it be daft to use that to pay of the remainder of my mortgage quicker or is a £5000 mortgage no different to a £5000 overdraft?

I have a feeling that this is one of them 'there's no such thing as a stupid question' ............but really is one :rotfl:

Lomion

glastowinebar wrote:

Could anyone tell me what the interest rates are on an average overdraft?

In a couple of weeks time I will be paying in the surrender value of my endowment which will bring my mortgage down to £9000, which I will pay off in three years.

I have an overdraft facility of £5000, would it be daft to use that to pay of the remainder of my mortgage quicker or is a £5000 mortgage no different to a £5000 overdraft?

I have a feeling that this is one of them 'there's no such thing as a stupid question' ............but really is one :rotfl:

Compare the interest rates. If the overdraft costs you less interest than the mortgage charges then yes.

for example Natwest charges 19% ish on overdrafts. If your mortage rate was over 19% then yes (unlikely tho)

If you have a cheapie OD facility with A&L, it might be worth it

PoorDave

Or, get some 0% interest credit by reading up about stoozing (see elsewhere on MSE), and put the outstanding mortgage to bed that way.

I know it doesn't answer your original question...

CLAPTON

Its unlikely an OD will be cheaper and remember that an OD can be called in at any time... so in these uncertain financial times I'ld stick with the mortgage

glastowinebar

Thanks all, it gives me something to think about

EDIT: I've just seen the Halifax Moneyback current account that gives an arranged overdraft facility of 6.9%

whereas from January all their normal current account arranged overdrafts will be 18.9%

Time to switch methinks

http://halifax.co.uk/bankaccounts/interestrates.asp#Current_interest_rates_on_overdrawn_balances

Lomion

A & L

http://www.alliance-leicester.co.uk/currentaccounts/index.asp?page=premier-direct&ct=curracchome

0% for a year followed by some weird 50p/day thingy. But I'm pretty sure there will be something else you could swap to in a years time

Abbey also do some good deals iirc?