overpay daily interest on mortgage or just get a loan ?

[Ilovejapcrap]

Hello all,

Please help i'm rather confused.

So basically I have a small mortgage as well as my large one (would not let me add to existing!) of £5000

Its got 17 yrs left on it and is daily interest calculated

the rate is 5% I'm basically paying 33.70 a month.

i can get a personal loan for 3 years at 146.39 for the 5grand and will pay back a total of £5,270.

or i can over pay on the mortgage by £112 a month, which is best ????

[sidicks]

Ilovejapcrap said:

Hello all,

Please help i'm rather confused.

So basically I have a small mortgage as well as my large one (would not let me add to existing!) of £5000

Its got 17 yrs left on it and is daily interest calculated

the rate is 5% I'm basically paying 33.70 a month.

i can get a personal loan for 3 years at 146.39 for the 5grand and will pay back a total of £5,270.

or i can over pay on the mortgage by £112 a month, which is best ????

If the interest rate on the mortgage is higher than on the loan (which (unusually) it appears to be!), then (economically) it would make sense to take out the loan to pay off the mortgage!

[Jag_luvver]

MASSIVE EDIT - totally screwed up the mental maths.

Go for whichever has the lower interest rate. Comparing interest rates from one with monthly payments from the other is like apples and oranges.

You may be able to get the lowest interest rates by remortgaging - around 1% should be achievable with 60% LTV or better.

Edited by Jag_luvver on Saturday 20th January 14:34

[Jockman]

I didn't even know you could get a mortgage for £5k. I thought the min was £25k?

Shows what I know !!

[anonymous-user]

And I certainly didn't know you could get a personal loan at a rate of 1.8%

£5,000 loan at 1.8% = £90 interest p.a. for 3 years = £270 so total repayment £5,270 as per the OP.

1.8% ??????????

[sidicks]

rockin said:

And I certainly didn't know you could get a personal loan at a rate of 1.8%

£5,000 loan at 1.8% = £90 interest p.a. for 3 years = £270 so total repayment £5,270 as per the OP.

1.8% ??????????

You've calculate a flat rate, not the APR, which is more like 3.6%.

Edited by sidicks on Saturday 20th January 19:27

[Ilovejapcrap]

Jockman said:

I didn't even know you could get a mortgage for £5k. I thought the min was £25k?

Shows what I know !!

i was trying to add it to an existing one. they made it a separate one

[bugmenot]

Are there any limits or charges that apply for overpayments on the mortgage?

[Whistle]

Ilovejapcrap said:

i was trying to add it to an existing one. they made it a separate one

Are you sure they haven’t made it a sub account off your main mortgage?

I have 2 x sub accounts off my main mortgage.

[Ilovejapcrap]

Whistle said:

Ilovejapcrap said:

i was trying to add it to an existing one. they made it a separate one

Are you sure they haven’t made it a sub account off your main mortgage?

I have 2 x sub accounts off my main mortgage.

Positive to a free standing mortgage

[nw942]

If you Google 'interest calculator' it will show you a page that works out the total cost of interest for you over the term.

The key thing about the mortgage is that you get a lot of compound interest over 17 years. So even if the mortgage rate was 1% it would still cost more in interest if you ran it to term.

HTH