Mortgage Overpayments

Simongo1

Good afternoon - I'm after a bit of advise please.

I moved into my new property in June 2011 and was able to transfer my previous mortgage across and took out another mortgage for the remainder.

I have my initial mortgage which was £100,079 at 3%
The second mortgage was £77,571 at 4.88%

I want to make regular overpayments on my mortgage and have set up £20 a week on the 4.88% mortgage and £15 a week on the 3%.

Does this make sense, or would I be better paying all the money towards the 4.88%?

Any advise would be appreciated

kingstreet

You should be making the maximum overpayment you can, subject to any early repayment penalties, on the sub-account with the highest rate.

Simongo1

Thanks kingstreet - Will this make me the largest saving?

To me it makes perfect sense to overpay the 4.88% account, but then I have a niggling feeling that I need to reduce the £100k balance even though it's only at 3%

dotdash79

Some of your monthly payments should be going to lower the 3% mortgage anyway so this should be reducing.

However overpay the highest intrest rate first.

Simongo1

dotdash79 wrote: »

Some of your monthly payments should be going to lower the 3% mortgage anyway so this should be reducing.

However overpay the highest intrest rate first.

Yes - I have two payments being collected each month - One for the 3% mortgage and the other for the 4.88%.

I will amend my standing order to just make the over payments on the 4.88% mortgage.

Thank you