Pay off car Loan or put into mortgage?

J

Jane1

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Hi, I have 12k saved.
My car loan is for 12k with 4 yrs left at 8.25% and I also have a mortgage of 155k at 4.75% with about 15 yrs left. Which would be the better option to save me money pay off the car loan or bring down the years on my mortgage? Or maybe invest it. Any advice would be appreciated.
J.
 
You could pay off the car loan now as it has the highest interest rate and then put the amount you were paying on the car loan, or more, into the mortgage (paying off the capital amount) or an investment fund. My preference would be to pay off your debts first.
 
I fully agree with Old Jim, Pay off car loan and increase your repayments on the mortgage or put the car repayment money into a regular saver for when you want to change the car again.
 
Thanks Old Jim and NHG, thats what I'm going to do. As you say once I clear the debt I can use the repayments I would have being paying to save again and invest or increase my mortgage repayments.

One thing I wonder though is, if it is better to try and pay off your mortgage quicker say over 15 yrs or put it over 30 yrs and take the difference in repayments and invest it say in another property or shares???
What do you think?
J.
 
Personally speaking I would prefer to have a lower mortgage thus saving alot of interest. It is worth trying those mortgage calculators and throwing a few figures around in them - quiet amazing.

I know that I will save aprox €20K in interest by clearing my mortgage 13 years earlier (which I did) which does'nt even account for interest rises!
 
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