which to overpay on?

glass_half_full_4

Hi , I've never posted before, but here goes,
my mortgage is part interest only (£40,000 with another 9 years to run) and part repayment (£62000 with 21 years to run) my question is if I make overpayments which one would be the best to overpay on and will benefit me most?
ps. the overpayments won't be very big but it all helps!
thank you
glass half full.

Joe_Bloggs

You do not quote any interest rates for the parts of your mortgage. What plans are there in place to pay off the interest only part ?
J_B.

Thrugelmir

glass_half_full wrote: »

ps. the overpayments won't be very big but it all helps!

Providing you maintain the total payment at the same level. Then every month you'll pay less interest and reduce the capital balance more.

Attributed to Einstein. "“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”

glass_half_full_4

see i knew i'd forget something imortant!
they're both on 3.99% for 4 year,s then to building societies standard rate, and there is an endowment to cover the interest only part of the mortgage, currently £40,000 is the lowest estimate it should make when it matures in 9 years time.
thanks
glass half full.

dimbo61

If you are paying the same interest rate on both parts then it wont make any difference which part you pay.
Every penny you can afford to overpay will save you interest and help you become MORTGAGE FREE sooner.
If your endowment is on track to pay off the £40K on IO then overpaying the Repayment part will make you MF sooner

Gentoo365

Do you even have the choice?

Financially it will make no difference. As either way you are reducing the capital and the rate is the same.

However I would be tempted to overpay on the interest only part, so that you have some room if the endowment does not mature as expected.