Mortgage and credit card

[Lucyccfc68]

I am currently on a 5 year fixed rate, which comes to an end in October 2021. I’ll be looking for another fixed rate mortgage nearer the time. House is worth £170k and outstanding balance owed on my mortgage is about £52k.

I have about £5k that I owe on a credit card.

Is it possible to add the £5k to my new fixed rate mortgage in October so I can pay off my credit card?
If this is not allowed or frowned upon - could I ask for £5k extra to pay for ‘home improvements’ instead and then pay off my credit card?

You’ll be paying interest on that 5k for how many years?

Slap it on a 0% then move it every time the deal ends.

You would be a lot better off doing an interesting free balance transfer. Adding it to a mortgage is just dragging the debt out.

Don’t put it on your mortgage! Move to a 0% card.

Don’t put it on your mortgage. Switch to another 0% card. Otherwise you’ll be paying it off for years and years!

Yes you can. There’s no need to say it’s for home improvement.

The key thing then is to make sure you don’t build up a new cc debt .

Thank you so much for all your advice.

I have just transferred to a 0% card for 24 months, with a 1% fee.

Excellent. Can I suggest you work out how much you need to pay each month to pay the debt off in the 2 years and set up a monthly standing order for that amount?

In normal times, it's best to pay the minimum and save the rest in a separate account to earn a bit of interest, but it's barely worth the bother these days. The standing order also means you'll avoid a minimum payments marker on your credit file, so better for your credit file when you come to remortgage.

@BarbaraofSeville

Excellent. Can I suggest you work out how much you need to pay each month to pay the debt off in the 2 years and set up a monthly standing order for that amount?

In normal times, it's best to pay the minimum and save the rest in a separate account to earn a bit of interest, but it's barely worth the bother these days. The standing order also means you'll avoid a minimum payments marker on your credit file, so better for your credit file when you come to remortgage.

I worked that out too and am going to set up a direct debit each month for pay day. I have a savings target to reach over the next 5 months, but then once that is out of the way, I plan to increase the direct debit too to pay the credit card off quicker.

Just a thought, only because I’ve just remortgaged. I had a 5 years fixed rate that finishes in July, at nearly 3%. I called the bank and took another 5 years fixed term starting from April. You’re allowed to do that 3 months before your fixed term finishes. I don’t know if you knew that, it’s just a bit more money saved :) (it more than halved my interest rate)

@BuddhaAtSea

Just a thought, only because I’ve just remortgaged. I had a 5 years fixed rate that finishes in July, at nearly 3%. I called the bank and took another 5 years fixed term starting from April. You’re allowed to do that 3 months before your fixed term finishes. I don’t know if you knew that, it’s just a bit more money saved :) (it more than halved my interest rate)

Great advice, thank you. I plan to start looking now in August time. I may not stay with my current provider - just have to wait and see what’s on offer at the time. My current rate is 1.95%.