Is it better to use a personal loan to pay off my mortgage?

Posted on 16 February 2013 by Graham


I have a mortgage of £30,000 and I have £15,000 in savings. I'm thinking of borrowing £15,000 (personal loan) and paying off my mortgage now, this would be a 5 year loan . I reckon I would pay less interest than if I kept my mortgage for the 5 years, or is there something better you could suggest, Thank you.

Graham,

Personal loans aren't really our field of expertise, however this strikes me as more of a monthly budget issue.

As the interest rate on a mortgage is significantly lower than those applied to personal loans, the better way may be to find out what a £15,000 personal would cost you over 5 years, and if it's affordable to you, then pay down half the mortgage with your savings, and set the payments on the remaining balance to the same level as you would pay on the personal loan. You should find that you'll be able to pay the £15,000 off even quicker than 5 years.

Regards,

Alistair

contact@johncharcol.co.uk

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