Borrow from mortgage overpayment or liquidate ISA?

redxs

Hi - thanks in advance.

I have a car and the finance is ending soon. I’d like to keep it and the final payment is £10,500 due 21/10/2024. Currently I repay £230 a month.

Personal loans are looking at 6.1% for me. All will be £1000+ in interest.

I thought of borrowing from my mortgage overpayment reserve. I have a mortgage with Nationwide - with an overpayments reserve of £35,000. But 14 months ago I took out a new lower fixed rate with them and today I found out they won’t let me borrow from the overpayment reserve. They took a complaint from me as I was always under the impression I would be able to borrow from this. So there is a small chance when the complaint is resolved they’ll allow me to borrow back the money. My current rate is 3.99%.

Anyone have any idea how successful my complaint will be?

I have a shares ISA with HL. £30,000 with about 33% total growth over several years.

The best option would be to use my mortgage overpayment if this is allowed?

After that, would it be best to liquidate parts of the ISA? I’d avoid £1000+ in interest, and would be able to use my £230 finance repayments towards either the ISA or further mortgage overpayments.

MEM62

Frankly, adding to your mortgage to buy a car is nuts.  Take the money from your share ISA.  

TrickyDicky101

Nationwide stopped offering the re-borrowable overpayment reserve [on their mortgages] back in the 00s so you must have a very old mortgage.  *Unless* you had been on the BMR since your original fixed rate expired (assuming you had a fixed rate originally) when you took a new customer retention mortgage deal (eg to a new fixed rate) you would have lost the re-borrowable over payment reserve facility and will just have one that will cover your normal periodic mortgage repayments should you be unable to make one.  Assuming this is the case and is why you can't borrow back the reserve then I am afraid I don't think your complaint will change that. 

redxs

Yes I had an old mortgage on the BMR which I was OK with until rates started to increase.
I’m hopeful they’ll look on me favourably - cost of living and all that.

Hoenir

redxs said:

Yes I had an old mortgage on the BMR which I was OK with until rates started to increase.
I’m hopeful they’ll look on me favourably - cost of living and all that.

The terms and conditions of the product you applied for will be explicitly clear. 

silvercar

I’ll move this to the Mortgage board.

Newbie_John

ISA, just withdraw the £10k from there. Quick and easy.

kingstreet

Nationwide removed borrow-back in March 2010 and it was only retained by those who have made no changes (such as a product switch) since then. I can't see that being reinstated for you, sorry.

"If your client(s) took out their mortgage product deal with Nationwide on or before 3 March 2010, they'll move/have moved to our SMR at the end of their deal. Your client will have access to borrow back and payment holiday facilities. If your client chooses to switch to a new mortgage product, they'll no longer have access to these facilities.

If your client(s) took their mortgage out with Nationwide on or after 4 March 2010, they'll move/have moved to our SMR at the end of their deal. Your client will not have access to borrow back and payment holiday facilities."

Altior

In this position I would consider using MT & possibly BT credit card(s). Several unknown factors of course, but there is a potential to juggle this around so you get the funds to purchase the vehicle outright, and have the liability on long term 0% interest credit cards. Done well the only costs would be limited fees. Primary considerations would be current CC borrowing (if any), and identifying what deals you could potentially obtain via a soft search (or existing offers if you already hold cards).