Question:
I have 375k coming off a fixed term at the end of this year, the current rate is 4.99 from a fixed loan we took out 4 years ago. The loan is currently on P&I payments and I'm wondering if we should look to go to IO.
We still have private debt on our PPOR but its good to see the rental property debt reducing also at the same time. Our work situations have not been affected by the cover 19 crisis and all our payments are being made
as usual. New interest rates are low so some good savings to be gained at the end of the year. Here are some of the options available to me.
1. Stay on P&I, fix for a year at 3.09(current tsb rate) use surplus to pay down a RC account with some debt on it.
2. Change loan to IO for a year at 3.09 and use surplus to pay down PPOR debt, reducing loan term.
3. Float the loan in December on P&I and wait to see where rates go, leave surplus in RC account or pay off more PPOR debt.
4. Fix loan on IO, use surplus to buy peoples toys they are forced to sell amongst cover 19 & have a good time! (no where to go, sigh!)
Lot to ponder but questions remain, how low will rates go, is this the time to be paying off debt or save for rainy days ahead. Will the banks even let us go on IO? We are cashflow +ve atm so no pressure their either and we are looking to buy another in about 6 months time.
FH
I have 375k coming off a fixed term at the end of this year, the current rate is 4.99 from a fixed loan we took out 4 years ago. The loan is currently on P&I payments and I'm wondering if we should look to go to IO.
We still have private debt on our PPOR but its good to see the rental property debt reducing also at the same time. Our work situations have not been affected by the cover 19 crisis and all our payments are being made
as usual. New interest rates are low so some good savings to be gained at the end of the year. Here are some of the options available to me.
1. Stay on P&I, fix for a year at 3.09(current tsb rate) use surplus to pay down a RC account with some debt on it.
2. Change loan to IO for a year at 3.09 and use surplus to pay down PPOR debt, reducing loan term.
3. Float the loan in December on P&I and wait to see where rates go, leave surplus in RC account or pay off more PPOR debt.
4. Fix loan on IO, use surplus to buy peoples toys they are forced to sell amongst cover 19 & have a good time! (no where to go, sigh!)
Lot to ponder but questions remain, how low will rates go, is this the time to be paying off debt or save for rainy days ahead. Will the banks even let us go on IO? We are cashflow +ve atm so no pressure their either and we are looking to buy another in about 6 months time.
FH
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