Loan Vs Equity

B

banker

Guest
Hi

Am living in house I bought in 2004, value of house gone up by 100k - I need about 10k to finish it out and am wondering is it worth getting some of that equity released in the house or else get a 5-7 year personal loan - can get the loan at 5.5%, I would go with that its prob as getting 10k over a mortgage term seems bit silly, even though rate is less, any thoughts/suggestions?
 
Alternatively use the equity release to get the lower rate and pay it off at the personal loan rate (by topping up your mortgage repayment by an equivalent amount to personal load repayments) to clear (at least that part of) the loan over a more realistic term. Keep an eye out for any additonal costs in getting the top up that might make that option more costly even in the shorter term.
 
You may need to look at what Mortgage Protection you have in place, as this amount probably would have to be increased to cover the new funds.
 
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