HELP WANTED overpaying of Mortgage

avoniel

Hi I have 2 mortgage accounts on 1 house and with 1 provider.

On 1 account I owe approx £12000 and the other approx £4000.
I have a car loan paid out recently and wish to use this money (about £200pm)to pay extra off mortgage.
Would anyone have advice if I should pay £200 off one loan, split it between loans or does this not really matter?
Many thanks

HelpWhereIcan

depends if one is charging you a higher rate of interest than the other and whether both (or either) will allow overpayments.

Rough rule of thumb is to make payments towards the one that is charging the higher rate of interest first, although this could be a bad idea if there are any early repayment charges levied on overpayments, in which case it may pay to overpay the other.

If they both charge the same rate of interest etc, then I am not sure it would matter really (unless one has a longer remaining term than the other in which case repay the one with the longer temr first).

Post more details and I am sure someone will give you some guidance.

Hope this helps

avoniel

Thanks for this.
both mortgages are at same interst rate and are flexible so therfore allow early payment.

Take it therfore I would be better paying extra off one I owe most on then?
Thanks

ShaunJUK

jmcateer wrote:

Thanks for this.
both mortgages are at same interst rate and are flexible so therfore allow early payment.

Take it therfore I would be better paying extra off one I owe most on then?
Thanks

If they are both on the same rate it would make no difference, I would say pay off the smaller and try and reduce yourself back down to 1 mortgage account.

Of course I am no expert so I expect someone to tell me I am wrong but that is what I would do.