Mortgage or 0% credit card

waves117

Hi

My aim is to be mortgage free as quick as possible and i have been mulling over a few ideas and just need a little bit of advice.

I have a fixed rate mortgage of around £27000. the fixed rate is due to finish this September (2008).

would it be a good idea to get 1 or 2 credit card with 0% interest for the longest term possible for balance transfers (1 year i think is availble from sept) rather than enter into another mortgage with around 6 or 7% interest rate? I would be aiming to pay off £1000 each month, this way i could pay off my mortgage within 2 years.

the only hiccup i can see is, if after 1 year (sept 2009) there were no other 0% balance transfer deals going on. But then I guess I could just get a standard loan for the remaining £12000?

I am in a secure job - well as secure as can be (NHS) so no chance of redundancy. I always pay off my balance on my current credit card, so no other debts.

Any opinions would be greatly appreciated.:rolleyes:

Thank you

Welshlassie

I don't think there are many (if any) CC's out there with 0% deals on BT at present. I other thing being would be you able to get a credit card with a limit that high, even 2 cards you would need around £13-14k. This is a very high limit.

The other option would be to find a low Life of Balance card/s if you can find one.

Jonbvn

This is called stoozing and there is a forum on MSE for this. The way you would have to do it is to remortgage onto an offset mortgage, and offset the stoozed money against the mortgage.

Given the BT costs in force now, this is not as good a deal as it used to be.

waves117

Thanks Welshlassie for your reply

hopefully by september (if i pull out al the stops) my mortgage will be around £20k so 2 cards with BT of £10k would do (ok 3 at a push as i am being hopeful for 2 @ £10k each) - i appreciate these may be hard to find but there are a few out there with 0% balance transfer (capital one, halifax)

As for the low "life of balance", i hadnt thought of this. I see from Martins site that HSBC is offering new cardholders 2.9% on debts shifted for 2 years plus a one-off fee of 2.5 % of the balance shifted; this may be the way forward for me.

magyar

If I was in your position, Waves, I'd switch to the best rate offset mortgage that I could.

Then effectively you can pay off the mortgage as quickly as you like with no penalty and you're not stuck with the requirements to be as rigourous as you have to be when you're stoozing.

waves117

Thanks Magyar

again i hadnt thought of this option...I dont know much about "offset" martgages but Im willing to learn. I understand the prinicple - so I had better do a little more research for best rates.

getmore4less

Offset is the best option, When you can get cheaper money you do it upto 100% but watch the BT fees and make sure you work out the true rate for the transfer

With such a small mortgage the difference in interest for different rates is quite small so features are the key(allthough most offsets will be fine but beware the oneaccount it will not be the cheapest).

Some allow cash ISA's to be offst to you could benifit from that if not allready using the allowance.

You will probably need to mortgage for £25k but thats OK you just offet imediately.

Also consider taking the loan out for the full 25y/60 and for as much as you can interest only and make sure it is portable this way you have access to cheapish money when ever you want and if you move up market you have a ready made mortgage rather than having to apply again which may or may not be easy.

Once 100% offset this costs nothing.

fatbelly

Info on stoozing, latest credit card deals and offset mortgages on stoozing.com