Two mortgages - which to overpay

Yzfr6

Hi,

I have two mortgages and not sure which I should overpay. I can overpay one by 1000 a month. I know you should overpay higher interest rates first just wanted a second opinion.

Mtg 1 - 246000 at 2.66% fixed till June 2013

Mtg 2 - 76000 at 4.99% variable

Mtg 2 is a rental property and mtg 1 is my main residence, if that makes a difference.

Thank you in advance for your help.

R_P_W

if it was me and assuming i already had a few months income as savings I would overpay the 4.99% one as much as I could without incurring any penalty

getmore4less

Need more information.

Whats your tax rate.

which debts are you offseting the interest against the rental income.

how much of the rental income is cuurently taxable
Follow on rate of fixed.

Yzfr6

I have about 20k in savings. I can overpay as much as I want from mtg 2 and limited to 10% p/a on mtg 1.

I am a basic rate tax payer. There is taxable income of circa 300 p/m on the rental property.

The interest is against the rental property assuming you mean offsetting the mortgage interest against tax?

Thank you both for your advice

getmore4less

Any plans to move or new investments that will need the capital as cash?

Even with the tax relief still better off paying the 4.99%