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Which mortgage to op first? Advice please
v1ckyt
Posts: 321 Forumite
Dear all,
Would like to pick your brains please.
I have a main mortgage with Woolwich, tracking at .19% above barclays bank base rate (BBBR) which is still currently matching BOE rate. I owe approx £66k on this. I have an additional loan of about £16k also with Woolwich, this one tracking at .59% above BBBR. Both have above 24 years left to run without overpayments.
Its probably very obvious but if I can afford to OP by say £100 per month, should it all go on the higher rate loan or should I split it, and if so in what proportions? Neither loan has any redemption penalties or restrictions on OP.
Many thanks for you advice.
Vicky
Would like to pick your brains please.
I have a main mortgage with Woolwich, tracking at .19% above barclays bank base rate (BBBR) which is still currently matching BOE rate. I owe approx £66k on this. I have an additional loan of about £16k also with Woolwich, this one tracking at .59% above BBBR. Both have above 24 years left to run without overpayments.
Its probably very obvious but if I can afford to OP by say £100 per month, should it all go on the higher rate loan or should I split it, and if so in what proportions? Neither loan has any redemption penalties or restrictions on OP.
Many thanks for you advice.
Vicky
0
Comments
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Hi V 1 ckyt
The usual advice is to overpay the one with the highest interest rate so this would be your £16k one. I know in some cases people choose to pay off the smaller loan even if it is not the highest interest rate as they like the phycological boost of paying one off but in your case you can kill two birds with one stone here
Good luck with your plansMFW Start Date 1.4.08. Updated 23.1.18. MFW date 1.8.18
Original Mortgage o/s £187,643 / £71,904 (-115,739)
Repay o/s £92,661 / now £55,900 (-36,761)
Int Only o/s £94,982, now £16,004 (-78,978)
Total daily interest £1 [a) £0.77 b)£0.23
Total OP's:2018 target £TBC YTD £1,9950
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