Which mortgage to overpay?

Seamonster_2

Hi all, new to the forum and after some advice re. mortgage overpayment.

I have two mortgages with the Nationwide, one a tracker and the other (a "further advance") on fixed rate. The latter is the larger of the two and, while I don't have the figures to hand, it was arranged "when times were good" so the interest rate will be around the 5% mark

I now wish to make a regular monthly overpayment of £100. Am I correct in assuming that this would be best made against the fixed-rate mortgage, as this has the higher interest rate? Or does it not make any difference which of the two loans I over-pay against?

Thanks for any advice.

Trying_to_be_good

Yes - overpay the highest rate mortgage (first), but be warned, overpaying becomes addictive as you see the balance owing reducing!

Seamonster_2

Thanks for the advice. I have made my first experimental overpayment of £100 against the fixed-rate mortgage (turns out the rate is 6.08% :eek:). That's gone through OK, so I'm now going to set up an overpayment standing order for £150 per month, which is the amount that my tracker repayments have reduced over the past year or so.

Not sure at this early stage whether or not to talk to them about reducing my term - I'll probably leave that until my current deals finish in 3 years time, when the overpayments will have hopefully made a dent in the outstanding balance.

ailuro2

keep it simple and watch your balance go down.;)

dimbo61

Check with NW but you should be able to overpay both parts by up to £499 A MONTH.
You are right to overpay on the fixed one but keep an eye on the tracker rate.
GOOD LUCK