Advice please for a newbie MF wannabe 27 July 2011 at 3:51PM in Mortgage-free wannabe 2 replies 529 views

Ladandnix

Hi

I need some advice please - after plugging away at the debts for the last 18 months I am finally in a position to focus on reducing the mortgage.

I have looked at the various calculators and cant find one that allows for adhoc overpayments in addition to regular monthly ones.

I have a mortgage on my home at 4.79% 52540 interest only to be paid off with endowment. 142000 is repayment. Currently 13 years left.

I also have a rental flat with 27000 outstanding with 6 years left at 3.5%

The question is what do i focus on first? I currently overpaying 200 per month on the house and 100 on the flat.

Sorry if the answer is obvious just a bit confused :-)

Many Thanks in advance

Nix

newgirly

Hi , if you go to the top of the MFW board, there is a thread by the funkygibbons, go to page 16 and there is a fab calculator called called "this much i know", it allows adhoc and regular payments, sorry i don't know how to do links , good luck!

SomersetSaver

Hi Ladandnix

If you're a tax payer, you can offset your mortgage costs for the rental flat against the rental income to reduce any tax paid on any profit (assuming there are profits) or to reduce your tax liability if there are losses. Therefore financially it would be better off in that situation flinging all the money at your home I would suggest.

You may also want to look at whether it would be sensible to release equity from the rental property to pay off some of the mortgage on your home, for the same reason. You might have to do some number crunching to work out what's optimum for you and it will depend upon what your return is on the rental property.

[This will all depend upon your personal circumstances, which I obviously don't know, so please don't take this as financial advice but HTH]

PS well done on clearing your debts and welcome to MSE