We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
can pay off mortgage, but....
I have an interest only mortgage on my residential home (£145K) 4.2% interest, and an interest only mortgage 5.74% on a buy to let HMO (£120K). I'm in a position where I can pay one of them off, the HMO 5.74% mortgage, but it has 3 years left to run, and has a 3% early repayment fee, £3670. Is it worth a chat with the lenders, Kent Reliance, see if there's a better way out?
Comments
-
How much interest do you save by paying off?
By my reckoning @5.74% on £120k is costing you £574 per month so £20664 over 3 years + £120k = £140664
Whereas you to need to pay off £120k + £3670 ERC to clear it now
Can you get more than £20664-3670 after tax in interest over 3 years? - £16994
120000 @4.4% for 3 years will give you £16900 but you need to cover tax as well.
So 5.5% should cover that giving you £21242 interest before tax.
Do the same for your other mortgage and see what the broker might offer.
Your life is too short to be unhappy 5 days a week in exchange for 2 days of freedom!2
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.1K Banking & Borrowing
- 254.3K Reduce Debt & Boost Income
- 455.3K Spending & Discounts
- 247.1K Work, Benefits & Business
- 603.7K Mortgages, Homes & Bills
- 178.3K Life & Family
- 261.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards