Pay off 6.2% fixed or 2.5% variable?

ArtySin

I have four different sub accounts to my mortgage. Three of those parts are now 2.5% variable whilst the fourth is still on a 6.2% fixed until July 2012. I am able to make regular monthly overpayments so my question is this. Do I pay off the higher rate first, spread the overpayments across all four accounts or only pay off the accounts with the 2.5% rate?
Any advice appreciated.
Many thanks

Thrugelmir

Pay off the balance with highest rate of interest first. So the 6.2% sub account.

getmore4less

6.2% up to penatly free amounts.

If this drops to a rate lower than 2.5% then you need to do some more calculations but even then it is most likely still going to be that part.


If you still have money over then you might find some savings accounts that pay a bit more than 2.5% net, monthly savers or cash ISAs, index linked ones worth a shot.