What would you do?

missile

I would appreciate your advice :
I own a second property and have an interest only 8 year mortgage and the two year fix ends Dec 31st. 
1. I could renew mortgage with another 2 year fix at 6.33%
2. I have sufficient cash to repay the mortgage, but that would reduce my instant cash available to a level I am not comfortable with.
3. I could obtain a personal loan at 6.4% to give me a comfortable cash on hand.

I feel inclined toward option two.

silvercar

Option 4. Get an offset mortgage. Put all your savings into the offset account, so pay zero interest on your mortgage but know the money is available should you need it.

400ixl

Why not a mix of 1 and 2. Reduce the mortgage to a level that you would can keep a cash reserve you are comfortable with.

missile

Hi, Thanks for your suggestions, please be advised:

To get an offset mortgage / a provider with better rate I would have to change provider. If I change Mortgage Provider, I would have arrangement & revaluation fees.

Re-mortgage at a reduced level is a sensible option. I intend to sell property as and when it becomes vacant. I would still have to abide by conditions and if within 2 years I would have penalty charge.

kingstreet

missile said:

Hi, Thanks for your suggestions, please be advised:

To get an offset mortgage / a provider with better rate I would have to change provider. If I change Mortgage Provider, I would have arrangement & revaluation fees.

Re-mortgage at a reduced level is a sensible option. I intend to sell property as and when it becomes vacant. I would still have to abide by conditions and if within 2 years I would have penalty charge.

There are fee-free options and also products with no ERCs.

missile

kingstreet said:

missile said:

Hi, Thanks for your suggestions, please be advised:

To get an offset mortgage / a provider with better rate I would have to change provider. If I change Mortgage Provider, I would have arrangement & revaluation fees.

Re-mortgage at a reduced level is a sensible option. I intend to sell property as and when it becomes vacant. I would still have to abide by conditions and if within 2 years I would have penalty charge.

There are fee-free options and also products with no ERCs.

My IFA and I have not found any of those which offer a better rate than 6.33%

penners324

missile said:

kingstreet said:

missile said:

Hi, Thanks for your suggestions, please be advised:

To get an offset mortgage / a provider with better rate I would have to change provider. If I change Mortgage Provider, I would have arrangement & revaluation fees.

Re-mortgage at a reduced level is a sensible option. I intend to sell property as and when it becomes vacant. I would still have to abide by conditions and if within 2 years I would have penalty charge.

There are fee-free options and also products with no ERCs.

My IFA and I have not found any of those which offer a better rate than 6.33%

Go to a mortgage broker 

missile

My IFA is a mortgage broker. 

Newbie_John

Well, if the question is what would I do?
I would pay it off.

You say you can access money on similar rate if needed (3), I assume you have income - so could save more for the first few months to get yourself to comfortable place. You'd be saving quicker as you won't be paying any interests.