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Paying off mortgage - start a new one to buy a car?
Comments
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That's another option, thank you for your alternative idea.
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Most helpful post answering my question and giving useful responses. Thank you!
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My fixed rate mortgage term comes to an end so rather than start a new one we've been overpaying what we can and saving to pay it off. Rather than having to start a new one with a higher rate.
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You should be aware that what you are proposing was one of the major contributors to the UK's own spiralling personal debt crisis leading up to the financial crash in 2008.
For many years prior to the crash, spiralling house prices coupled with indiscriminate lending by the banks encouraged millions of people to use their homes like ATM machines to access cash for short term consumer purchases like cars, expensive holidays and the like, as well as funding everday living costs thereby squandering house equity on items that ultimately diminished rather than enhanced personal wealth.
The global 2008 finanicial cash and accompanying UK fall in house prices, brought this unsustainable debt edifice crashing down with severe consequences for those who over extended themselves.
Government learnt a lesson and imposed prudent limitations on the purposes banks could advance mortgage finance as well as looking closely at borrower's affordability.
You should not be looking to turn back the clock and make the same financial mistakes of the past.
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So could you use those savings to buy the car and just carry on the mortgage? If you need to use the savings to pay it off then presumably you've not reached the term of the mortgage?
Remember the saying: if it looks too good to be true it almost certainly is.1 -
Depends what you’re looking to buy.
I have just got 1.39% for a new car purchase off the manufacturer finance.0
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