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17 September 2012

Pay off 0% interest card, or use the money to offset against mortgage and transfer the balance

Hi all, this is my first post here so please could you help me with how I work the following out......? Here are details: * I have £20k on a soon to run out interest free c/card. * I have £20k sitting in my Bank Account that is being offset against against a £280k mortgage. * The interest rate on the mortgage is 2.49%, increasing to 3.69% in Apr-13. * if I balance transfer to a new credit card it will cost, say, £600 (assumption for this purpose is 3%) and that will then be interest free for 16 months. So, my question is: how do I calculate what is best for my money over the next 16 months? Should I pay the c/c off, or transfer the balance to another card and continue to offset? Ideally I'd like to be able to set this up as a model in excel. Let me know if you need anymore details. Many thanks, Gaz.

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