Move some debt to mortgage or leave as it is?

[Berriesandcucumbers1]

I'm asset rich (not exactly rich but almost all my money is in my house). Single income, my debt is just under £11k at the moment outside of my mortgage which is roughly £41k. House value somewhere between £220-£240k so I have a large chunk of equity and I'm due to pay it off in about 9 years. My debt was over £20k at one point due to some large things needing sorting on the house, not wants but needs.
My 0% interest on my credit cards is coming to an end later this year, my loan is 3.5%. my minimum payments are over £400 per month
Paying the debt back at this rate will take me about 2 years to clear
I'm debating whether to move the £11k debt onto the mortgage so I would have no credit card or loan debt and that would reduce my monthly payments down to around £120 a month
I currently try to save around £400 a month for my emergency fund but that's just been wiped out again by an emergency and I'm starting from scratch again. I'm careful on my budget, so not any expenses I can reduce now.
I know nobody likes to move unsecured debt to secured. But I'm seriously considering this to allow myself a bit more wiggle room to allow myself to build an emergency fund a bit quicker. If I add the £280 reduced minimum payment to my £400 a month savings I could save a 1 month emergency fund in around 4 months, I could have a 3 month emergency fund in around a year and I would feel a lot more financially secure
Once I'd got a good emergency fund, I could then try to clear down the mortgage debt quicker

I think that's true if the debt comes with risk. So, yes, don't finance your dodgy business venture using your house as collateral.

But if we're talking about a finite sum of money (eg to pay for building repairs) then increasing the mortgage is generally cheaper than other forms of debt.

Invest it in a diversified 100% equities fund inside an isa.

may I offer some unsolicited advice? Op you seem very good at calculating your costs on a range of short term options. You should really should consider using those skills to look at scenarios for long term wealth building. There’s more to this than paying off your home though I appreciate there’s a peace of mind factor that can’t be ignored. There are many resources out there that show that in many cases you are better investing an overpayment long term than overpaying.

I'm going to start by saying this is said with a friendly tone and is for food for thought and not intended to be accusatory.

You have done an amazing job of getting £200k of equity in your house and be in a position to be mortgage free as young as you are, however, is it possible that the situation you have found yourself in as come at the cost of this?

Sinking all of your cash into the house has left you as you said in your opening post as being asset rich, cash poor and then when work was needed on the house you were then having to take out loans and credit cards to cover the costs. This has given you less security not more. It's also put you in a position where you haven't felt able to start paying into your pension and as a result having been missing out on spectacular employer contributions jeopardising security in your retirement.

I don't know, nor need to know, the circumstances of how you got into the debts but from your opening post you said yourself they were needs not wants. It sounds a bit like you have been living a bit of a save-use-credit cycle and this has given you less financial resilience to those emergencies.

Don't overpay your mortgage at the cost of not being able to weather the storms. Minimising the cost of the additional mortgage by overpaying that somewhat make sense but maybe let the primary mortgage run it's course?

We are in the fortunate position of having quite a bit in savings and we have contemplated overpaying our mortgage more but for now we haven't. Last year my car looked to be terminally broken although the problem ended up being quite an easy fix (aside from it being off the road for over 6 weeks, purchasing and returning 3 different parts that didn't happen to be the right part and the end wait for the correct parts to be posted from somewhere in Europe). It was reassuring that should have needed to replace it, I could have done so without taking on more debt. The year before that our garage roof needed replacing and we were able to pay for that without using credit.

Having savings gives you options, as you've found it can be a bit trickier when a your cash is in your home

@Superscientist there is quite a chunk of equity just grown from buying when I did, but there were either chunks of lower pay where I couldn't save to become more resilient and then probably quite a period of maybe prioritizing the house over savings, like shortening the term last time I remortgaged where I should've really left it at the original term and saved harder. There were a few quite expensive things that I couldn't avoid paying to sort on the house and then I've just been focused on trying to pay down the debt as quickly as possible and saving so I didn't need to take on anymore debt.
But it did feel like I was in the cycle of never having enough in savings to deal with another emergency, which is basically what lead me to starting this thread
I feel a bit better now I've got a bit more of a plan to get my finances a bit more resilient than they have been, I think releasing that extra money and freeing up money out of my salary will give me more options around saving and investing without jeopardizing being mortgage free in my 40s.
I should have enough time to catch up on my pension now and should hopefully be able to save and invest a little now, then invest more once the mortgage is cleared.

Would I make all the same choices with my finances again, some weren't too bad, some could have been better, but fingers crossed this little rejig will allow me to correct some of the less positive choices.

I do need to start planning more for the long term. I have been watching some videos on YouTube about stocks and shares ISAs recently but just sort of thought I can't manage it right now in the position I'm in, it was something I would need to do in the future. I think I could possibly maybe split what I would've paid to overpay the second mortgage into some savings and maybe a little into stocks and shares
I suppose I won't worry about the mortgage not being cleared if I've got a healthy amount in savings. And even if I never make any extra payments to the mortgage, it will be paid in 9 years, I think I maybe just need to reset my instincts for getting the house paid ASAP

" I think I maybe just need to reset my instincts for getting the house paid ASAP"

I believe repressing your urge to pay off the house asap will be to your financial advantage in the long term. Money gives you options - cash in the short term for maintenance, essential costs (car, roof, boiler), and nice things like holidays; S&S ISA in the medium term - selling at a time of YOUR choice when the market is high (not when it's urgent) for things like house renovations, new car etc; and a comfortable old age in the long term, locked away so you can't use it until you retire.

If all you're doing is paying off your mortgage, then you have no short, medium or long term financial security, and you have realised the effect that has on your finances!

Well done for asking, and for taking the advice offered!

As well as echoing that pension will be the best use of your money out of all of these options may I add a small spanner into the works? Borrowing to generate an emergency fund when you don’t need it is going to cost. Although emergency funds are a very good idea please don’t borrow for a fictitious emergency when you have good enough credit to get a 0% card for such emergencies. It really doesn’t make financial sense.

Mortgage applied for properly... Now I wait

If I did nothing here is how my finances look now vs 3 years time

Today
Mortgage - £41000
Debt - £11k
Pension - £0
Savings - £0

In 3 years time
Mortgage -£28,258
Debt-£0
Pension - £0
Savings - £14400

Taking this new mortgage and paying extra monthly payments to savings and stocks and shares

Today-
Mortgage - £60000
Debt- £0
Pension £0
Savings £8000

In 3 years time-
Mortgage - £41675 ( making no extra payments)
Debt - £0
Pension contributions not including any growth (around £175 off my take home) - £35600
Savings - £15200 (saving £200 per month)
Stocks and shares Isa - £7704 (saving £214 per month)

I feel like the 3 years time in the second scenario would be a more balanced secure financial position

Yes I knew there must be a better way of doing things and been very grateful for some of the advice on this thread, so I've been able to come up with a plan that I'm more comfortable with.
I think I need to just think of the mortgage as a bill that will come to an end in 9 years which will allow me to invest more in my 40s rather than thinking of it as a proper debt.
I've cherry picks bits and pieces of different advise from this thread and feel pleased with my final plan. Obviously there could be some spanners in the works in the meantime but I think the new plan has far more flexibility if needed

Thanks to all that have offered advice and changed my views on how to adjust my finances

Yes, well done on asking the question, considering all the advice, and then applying it to suit your own situation and preferences.

You would probably still benefit from a chat with an independent financial advisor at some point.