Can anybody help me with a financial problem?

I'd be inclined to buy the car outright - any loan you get will have a much higher rate of interest than any mortgage.

If you're buying cash, you may be able to get a bit of a deal on the car too. Be cheeky!

Good points have been made above. I'd also add that if you're looking at moving they'll look at how much debt you have for your new mortgage. An extra 10K on the mortgage will look better than a 10K car loan if that makes sense.

Use this site to compare the cost over the term of the loan www.whatsthecost.com. Just because the interest on the car loan is higher, doesn't mean it will be more expensive. This is because the car loan will be over a year or two, whereas the mortgage is over what, 25 years? An example:

Borrow 10k on a 6% repayment mortgage (obv you have to guess the APR on a long term mortgage) over 25 years, you pay back a total of £19,329

Borrow 10k on a 15% car loan over 2 years, you pay back a total of £11,636

So, do your sums.

Also, consider if it is really worth spending £10k on car, or if you could downsize your expectations and put some of the money into savings for maintenance and some on the mortgage as well as buy a car.

Remember to start saving NOW for a new car in, say, 10 years time (if you want to spend £10k on a car in 10 years time, you'll need to save £83 per month for 10 years to get the money saved up).

If you need the car regardless of where funds come from I'd pay 6-7k off the mortgage and buy a car for 3-4k outright.

I can see you wouldn't want a car loan plus mortgage but as freda said you'll end up paying so much more over the term of the mortgage.

i guess the only situation i'd put it all against a car is if you're not concerned about paying your mortgage off early/ over a shorter term/ can deal with the potential increase in overpayments-

if the new house needs all available cash then i'd still put the 10k in the house, as you can't predict what rates will be like in the future. plus house investments are more likely to go up than an investment in a car.

-enough rambling from me-

Hmmm...mixed messages

We've got the money to buy both the house and spend £10k on a car (well, to pay for the mortgage/loan), the decision is just whether to get the loan or add it to the mortgage I guess.

Lots of useful points to look at and think about.

Thank you all for your replies.

I have no idea! I just nosed on here to see if anyone was going to accuse anyone else of being crass...

How is the house selling going? I remember you saying before its all a bit slow, so I'd probably do (b) as you don't know exactly what the house is going to add up to yet anyway,

I generally wouldn't borrow against a depreciating asset - ie buy the car outright.

Thanks seraphina.

Fimble - no signs of moving any time soon unfortunately. Really hope I haven't come across as crass by mentioning the amount of money. We're certainly not well off or anything and the house we buy will only be about the national average (3 bed detached in the midlands, nothing extravagant). We've only got the cash to be able to choose between the two options because a) my current car loan has just finished and b) I've just sold my house.

I would would say you should put it towards the mortgage because building a home is very important to help kick off the marraige. You guys need to make your nest ! Also the car will be less money so taking out a loan for that would end up being less interest paid compared to taking out a bigger mortgage. Maybe you guys should look into remortgaging if your worried about financial issues--here is some good info on that http://uk.moneto.eu/financing/personal-loans/avoiding-debt/debt-consolidation/remortgaging-for-debt-consolidation/

As for a loan for the automobile there are a lot of website that compare rates for personal loans. I have used this one before..maybe it would be of use to you as well I hope!

https://www.uswitch.com/loans/cheapest-loans-uk.html

That is just my personal advice, hope it is of some use to you!

Buying the car cash is the best way outside of spreadbetting of turning your 10K into significantly less very quickly.

Personally, I would be looking to invest the 10K for as long as it takes to sort out your house and then using that money against the mortgage and getting a fixed rate HP agreement.

HTH

I too see a mortgage as the cheapest way of borrowing money but v interested prediction on the repayment amount.

I would spend the £10k cash on the car but shop around for a deal or try to find a 0% purchase deal through 1 of the large manufacturers. I now lease my car as it's often more reasonable for my usage and much harder to sell 2nd hand cars so you might consider this as well.

Absolutely the best way to save money is to pay off your mortgage as quickly as you can so try and overpay when you get your new place if you can.

I too see a mortgage as the cheapest way of borrowing money but v interested prediction on the repayment amount.

The monthly payments may be lower, but you are paying over such a longer period, that they add up to a much larger amount. You will still be paying for the car in 25 years time!!!

I would spend the £10k cash on the car but shop around for a deal or try to find a 0% purchase deal through 1 of the large manufacturers. I now lease my car as it's often more reasonable for my usage and much harder to sell 2nd hand cars so you might consider this as well.

£10k is a lot for a car, could you spend less? Be careful with any deal that you sign up to, that you are not tying yourself into a 0% intro period followed by a period with high interest. You don't need payment protection either.

Absolutely the best way to save money is to pay off your mortgage as quickly as you can so try and overpay when you get your new place if you can.

This is only true if you don't have other debts, and as long as the APR on the mortgage is LESS than the net APR on any savings account that you have (i.e. the APR after tax has been deducted).

Sorry to be a bore but this question simply cannot be answered without knoing an awful lot more about PP's financial cics, dependents, property, you name it. so sorry all, but this is all wrong, she needs to take advice from a professional to whom she can disclose an awful lot more than on here.

I agree. PP you really need to talk to a financial advisor who will do a fact find where they will look at your circumstances, incomings/outgoings, credit history etc etc and then be able to advise you on the best products according to that.

I don't think that there is anyway that anyone on a forum can answer that as it's not as simple as the interest on a loan being higher than that on a mortgage.

Nikki xx

Shows how much I know ?

I really thought that it was just a case of finding out which would cost/save me more in the long run.

I'll try and speak to an IFA then. Thank you.

Great advice, thank you so much!!!