Is it better to use a personal loan to pay off my mortgage?
Posted on 16 February 2017 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?
Personal loan to pay off mortgage
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.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.