Help with my mortgage

TOM180990

Hi all currently trying to see if there is a way to save some money on my mortgage and not sure if my idea is possible or not . I'm currently with lloyds bank for my mortgage and have 2 mortgages for my home one from my previous moved over and a new one for the extra amount needed . 

Mortgage 1 - 120,000 / 1.3% / ends 09/2026

Mortgage 2 - 79,000 / 3.9% / ends 08/2027

The house is estimated at 260,000 .

Would we be able to pull as much money as possible from the property and put all the money back into the higher % mortgage and save on the interest or is that not plusable ? 

Thanks all 

grumbler

TOM180990 said:

Would we be able to pull as much money as possible from the property and put all the money back into the higher % mortgage and save on the interest or is that not plusable ? 

Thanks all 

I don't understand. 
"to pull as much money as possible from the property" = to take an extra/new mortgage with the interest rate  higher than 3.9%. Correct? Then you want to pay this money back to the new mortgage? Correct?
Makes no sense to me. By doing this you can gain nothing and will probably lose on some fees.

bluelad1927

grumbler said:

TOM180990 said:

Would we be able to pull as much money as possible from the property and put all the money back into the higher % mortgage and save on the interest or is that not plusable ? 

Thanks all 

I don't understand. 
"to pull as much money as possible from the property" = to take an extra/new mortgage with the interest rate  higher than 3.9%. Correct? Then you want to pay this money back to the new mortgage? Correct?
Makes no sense to me. By doing this you can gain nothing and will probably lose on some fees.

It looks like the OP is saying can they they use the approx 50k "equity" and pay the 3.9% mortgage down

.....OP the answer is no

TOM180990

Yes bluelad1927 , could I not pull out the equity on the 1.3% mortgage and reduce it on the 3.9% one ? I did think it may have been a bit of a dream

MWT

TOM180990 said:

Yes bluelad1927 , could I not pull out the equity on the 1.3% mortgage and reduce it on the 3.9% one ? I did think it may have been a bit of a dream

Your equity is the difference between the value of the property and the remaining amounts borrowed on the mortgages.

You can only access that equity by getting a new loan, which would be at the current rates.

... and you are already a little above 75% LTV so your scope for additional borrowing will be low, even if it made sense, which of course it doesn't due to current interest rates.

TOM180990

Ahh OK thanks for the clarification I've never been good with mortgages,  wasn't sure if we could borrow on the current 1.3 but thanks for the information you've all been a great help 👍

lr1277

Over 5 years ago, I had an interest only mortgage with Nationwide. On the basis I made overpayments, they would allow me to take some of the overpayments out, but only upto the sum of my overpayments.
You don’t make clear in your OP, but if £120k is the mortgage amount, and because of the payments you have been making, the amount owed is £110k, then it might be possible Lloyds will allow you to withdraw the £10k, and you could use that to lower your 2nd mortgage.
You have to decide if the 2.6% interest difference is worth it on the amount you take out of Lloyds and pay into the 2nd mortgage. I do not know if Lloyds will treat you differently if you ask the question. Nor do I know if this will affect your credit file.
But I suppose if you think you have the spare equity in your Lloyds mortgage and you are keen, you could always ask Lloyds.
Of course another poster may advise on something I have not considered.