Pay Off Loan or Mortgage

L

ludermor

Registered User
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Sorry if this is too basic a question!
Current status is as follows.
Tracker Mortgage of 1.75% - balance 145,000 paying off 550/month
Credit Union Loan 27,000 ( rate 10.5% before rebate of 20%) paying off 550/month. Have share of 15k in credit union
I am able to pay off an additional 500 month and am wondering if i should pay it against the mortgage or the credit union loan. I know i have an excellent rate on the mortgage so should i be taking advantage of this and pay as much as possible off? I was planning on setting aside a lot of the shares against the loan in the CU when it gets close enough but i have heard that the CU makes this pretty difficult sometimes?
Thanking in advance
 
Pay the loan off first. It's costing you a lot more per € borrowed so you save more interest paying it off.
 
Cheers for that and that is what i would have thought but i started doing some sums and it didnt seem to obvious to me! Maybe someone can explin where im going wrong on this
Pay off 500 extra on the loan and i will pay it off in 2.75 years (as opposed to 5) and pay 2754 interest as opposed to 6236 ( figures got from an amortization table) resulting in a saving of 3482 on the interest paid.
However if i paid the extra 500 against the mortgage ( for 2.75 years ) i would be reducing the term of the loan 43 months and reduce the interest 8200. Am i using/reading the amortization correctly ?
 
Is there any chance you could get a term loan else where for about 13k. Use it to pay of the Credit union loan combined with shares. Pay it off over 2 yrs perhaps about 620 a month payment - depending on interest rate. I did this a few years ago with a loan and I feel it helped greatly as I could see the end of the loan period.
use the extra money to build up a reserve savings fund say for 6-8 months and then use the extra money to start paying off your mortgage.
How secure is your job?
 
I could look at that and i like the idea of having a resrve saving funds. I have just finished building a house so that has taken up pretty much all my money the past 3 years and only now when it is finished can i be more definite in my plans. I have made good inroads in the CU loan ( ie have paid over 20k in the 18 months) so i can see the progress but it was only when i put the figures against my mortgage it seemed i could be more productive than i am. I was paying an extra 650 to the CU for 13 months but had to hold back due to pay cut etc.
My job is secure in the shorterm ( next summer) but i work for a builder so i wouldnt be taking my job for granted.
 
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