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Pay mortgage off with loan, crazy?
holly876dog
Posts: 46 Forumite
Hi All,
I have submitted similar thread on mortgage forum but as you'll read I wanna be MFW!
Our mortgage deal runs out end of July and we'll owe about 33k. We have enough in both ISA's to pay this off, however, from as MSE view I'm not sure if this is right thing to do. We have about 8k in normal savings acc which would leave 25k. What to do next we are at loggerheads. Should we opt for remortgage, just pay the thing off or get loan. A loan will no doubt carry a higher APR but would not have to pay arr/exit fee/val/legals etc so may work out cheaper. We are looking to pay off in under 4 years and our credit rating should be good enough. Any advice or anyone been in similar circs I'd be grateful to hear from you.
Thx.
xx
ps offset with ISA could be way forward to but not sure if this is workable
I have submitted similar thread on mortgage forum but as you'll read I wanna be MFW!
Our mortgage deal runs out end of July and we'll owe about 33k. We have enough in both ISA's to pay this off, however, from as MSE view I'm not sure if this is right thing to do. We have about 8k in normal savings acc which would leave 25k. What to do next we are at loggerheads. Should we opt for remortgage, just pay the thing off or get loan. A loan will no doubt carry a higher APR but would not have to pay arr/exit fee/val/legals etc so may work out cheaper. We are looking to pay off in under 4 years and our credit rating should be good enough. Any advice or anyone been in similar circs I'd be grateful to hear from you.
Thx.
xx
ps offset with ISA could be way forward to but not sure if this is workable
Be not so busy making a living that you forget to make a life......
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Comments
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woolwich do an offset with isa mortgage.0
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woolwich do an offset with isa mortgage.
So do Intelligent Finance. Have you approached your current lender and asked them if they do an offset with ISA? If so, they may be able to sort something out with the arrangement fee, and as you will have a small mortgage, the interest rate will not be hugely important and it will not make a huge difference to your monthly payments.MFW 2011 challenge - Aim: Overpay £414.26 a month/£5,000 a year. Overpayment Total to date: £414.26:jMortgage start 28/9/07 £46,217.00 :TMortgage balance as of 25/05/11 £24,490.58 :T
Interest saved as of 25/05/11: £2,849.84 Projected term reduction as of 25/05/11: 9 years 11 months0 -
woolwich do an offset with isa mortgage.
So do Intelligent Finance. Have you approached your current lender and asked them if they do an offset with ISA? If so, they may be able to sort something out with the arrangement fee, and as you will have a small mortgage, the interest rate will not be hugely important and it will not make a huge difference to your monthly payments. Im not sure what the minimum mortgage you can get would be, it may well be that no-one will let you have a £25k mortgage. When I took mine out I seem to remember someone saying that the minimum that could be lent on a mortgage was £30k but I may have just dreamed that!MFW 2011 challenge - Aim: Overpay £414.26 a month/£5,000 a year. Overpayment Total to date: £414.26:jMortgage start 28/9/07 £46,217.00 :TMortgage balance as of 25/05/11 £24,490.58 :T
Interest saved as of 25/05/11: £2,849.84 Projected term reduction as of 25/05/11: 9 years 11 months0 -
Your current lender's SVR may be lower than the interest you'd pay on al oan, so you might be as well putting up with a higher interest rate for a few years, if it incurs no additional fees.
Depends on the flexibility too, and of course, how much do you want to keep in your ISAs?
what is the long term plan? Member of the first Mortgage Free in 3 challenge, no.19
Balance 19th April '07 = minus £27,640
Balance 1st November '09 = mortgage paid off with £1903 left over. Title deeds are now ours.0
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