Repayment strategy - help please....

Cashby

Hi, I have 2 mortgages and £80k to put towards paying them off.

Mortgage 1 with £154K outstanding is based on Libor + 1.99 at 2.5%

Mortgage 2 with £173K outstanding is based on base rate + 1.95 at 2.4%

Which one should I pay off? Maybe the one with the highest interest rate. But maybe Libor is likely to go up more than base rate?
Any thoughts appreciated.....

Jimbo1976

I would probably pay it off the LIBOR linked loan. LIBOR is based on what the city thinks is going to happen to the base rate. As no one thinks that the base rate will drop LIBOR is extremely unlikely to fall below the base rate, the closer we get (in the City's view) to a base rate increase the higher LIBOR will get. So LIBOR will increase in advance of a base rate increase.

Does your lender review and reset your "LIBOR" every 3 months?

Yorkie1

I assume neither has early repayment penalties?

vectistim

Is there any tax difference between them (is one a BTL?)

Cashby

The Libor is recalculated.
There are no repayment penalties.
They are both BTL.
I don't work and my rental income does not put me into a taxable position.
I might pay the lot off the Libor one then.