Which mortgage to make overpayments on?

Chris_P_2

I have 2 mortgages on the same property: one is for £55,000 and is on Skipton's SVR (so about 4.5%),the other is for £45,000 and is on a base rate tracker + 0.49%.
I have been advised that I should make overpayments where possible. But which account should i pay off or should i split any overpayment across the 2?

Thanks

kingstreet

If the lender will allow you to make overpayments to only one of the sub-accounts at a time, choose the one with the highest rate.

Chris_P_2

How come - surely the lower rate mortgage will mean more money is being paid off the capital?

cathh70

The same amount of capital will come off either mortgage, the amount of interest saved will be greater on the Skipton mortgage.

amblondon

Because by paying off the higher rate first you're stopping interest accruing at a greater rate - and interest in one period becomes capital in the next, basically.

fashionprincess

overpayments are in effect "capital payments" regardless of the rate of interest.
you would be reducing the capital owed and therefore paying interest on a lower balance. So if you paid it off the higher interest rate, you would see a greater reduction in monthly payment as the amount of interest you pay would reduce by more?? If this makes sense.

I understand what I'm trying to say anyway!!