Mortgage options

Monday, May 29, 2017

The question is from Richard, 50

We have a 25 year endowment policy that is due to mature on 22nd May 2017. We have a repayment mortgage as the endowment was never going to hit the target for clearing our mortgage. With mortgages being so cheap, should we look to improve our house and clear credit card debt, or should we use it to pay off a large chunk of our mortgage?

Answer by Alistair Beckett, CFPTM Chartered FCSI, Proprietor, John Roddick & Son

Credit card debt is relatively more expensive than mortgage debt and should therefore be paid off first. Thereafter the balance should be used towards home improvements to avoid having to borrow more on the mortgage unless the funding required can be incorporated into a competitive remortgage when the clients could opt to invest the balance instead.

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