which of these 2 is best remortgage deal?

hopeful_2

Hello,

Bank of Scotland have valued house at £170,000 and will lend up to 90%Northern Rock at £175,000 and will lend up to 95%

this means that on top of our existing mortgage of £119,830 Bank of Scotland would lend us a further £33,170 and Northern Rock £46420

With BoS we could pay off less other debts but at a better interest rate and though we could pay off more debts with Northern Rock, the interest rate difference means would end up paying about the same monthly amount.

Question is, which should we do, myself and Mrs Hopeful are going nuts debating this

Help please!!

angelavdavis

Have you actually been over on DFW board to see if you can rearrange your outgoings better to free up cash to lower your debts that way?

On the whole, it is better not to consolidate and turn unsecured debt into secured debt in case things go wrong later and you lose your house in the event of not keeping up the payments.

I personally consolidated in the way you are considering and just ran up the debts again. I then had to extend the mortgage term when interest rates increased and I couldn't afford the repayments. So my 18 year mortgage, after ten years, was increased back to 20 years! Not saying this will happen to you - just that it is very tempting to do this and adding onto a mortgage just adds on interest that could be avoided with some careful budgeting.

I ended up tackling the debts the DFW way and am now using the skills to overpay my mortgage too.

hopeful_2

Thanks Angela, unfortunately we are so close to the brink that the rate increase we've just had on the mortgage as we came out of a fixed rate deal in December means we have to consolidate as far as we can see.

I appreciate that this is not ideal, but is it not easier to be trying to pay off a debt at a lower interest rate which is what would be the case if we put all debts on the mortgage

doodle_bug

only borrow what you need to borrow to pay off the debt, a mortgage is generally the cheapest way to borrow apart from the deals on credit cards, don't be looking at how much they will lend you but at the lowest interest rates, there must be better deals than available at the 2 you have said.

You have mentioned about your fixed rate mortgage deal coming to an end, a lot of people are in your position right now, that is why the lenders are expecting a crunch, borrowing your way out of trouble doesn't work, if things are very tight the best thing to do is speak to your current lender, you'll be joining a long queue. I'd be interested to know how helpful the lenders are going to be to people at this time, the good thing is that it doesn't look likely the rates will go up in the near future, good luck.