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07 April 2011

Loans vs Additional Mortgage Borrowing! Please Help!

Hello everyone. I need around £8K to pay off an existing credit card debt where the interest rate has reverted from 0% to an astronomical rate. I have card tarted for ages but this doesn't really work that well for me for numerous reasons. I have now applied for a loan over 6 years at 9.2% which has been approved but the repayments are quite a lot. A friend then mentioned that I could add this to my mortgage as I have over 50% equity in the house. I phoned up Natwest who told me I could add this as an additional amount for 2yrs fixed at 4.59 or 5yrs fixed at 5.79. They both come with a £299 fee. The problem is, I can't pay this off in 5 years so I'm wondering: a) Do I get this loan over say 10 yrs or the lifetime of the mortgage and at which rate? b) If I go for this loan, what do I do once the fixed term is over? I understand (I think) how to remortgage but what's this additional amount and how do I deal with that? c) Do I go for the loan at 9.2 and just get it over with in 6 years? As you can probably tell, I'm very confused and really don't know what to do. Any help would be so very gratefully received. Many thanks fellow LoveMonyers... Tracy

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