I'm trying to work out whether or not there will be any benefit in redrawing from my mortgage to pay off my car loan. The idea is that if I pay off the loan, I can use the monthly car payments as additional payments on my mortgage. The interest rate on my home loan is lower than what it is on my car.
I'm not sure what information you will need so I will list everything I think is relavent (please let me know if there is any other information required):
- Home Loan is at a variable rate (currently 5.59%)
- Will need to redraw approx $10k to repay the car loan
- Car loan is at a fixed rate (8%), but I can get the 'payout' figure which is less than just paying the monthly repayments (still have 35 months to go on the loan)
What values should I be sticking in to which formula to work out whether or not there is any benefit?