Help with the maths, please!

getthebalance

Hi all
after lurking, deciding to post as I'm a bit stuck.


Basically, we've got two mortgages (a main one and then an extra bit which was an "advance" on the first part). In the lucky position of being able to OP, but not sure which part to put the extra money onto:


£55,566 at 4.49% (rate ending end of March)


£16,371 at 2.99%


Should we "help" the higher rate part or slap it on the lower rate part?


Also, if I want to use the overpayment calculator, what rate would I put in?! To be roughly accurate...


Thanks


getthebalance

redped

Overpay whichever has the higher interest rate.

Happier_Me

Usually, you should OP the mortgage with the higher rate - what does the rate change to when it ends on the main mortgage?

I would check with your mortgage company befire you make a decision as there may be rules you need to follow depending on which loan you pay off. You may have OP restrictions on your main mortgage but none of your mortgage advance, for instance.

I currently OP the main mortgage (we have two mortgage advances at a lower interest rate) on our offset mortgage - this is because the rate is higher but also because any OP against this part of mortgage sits in a 'reserve' fund that we can access if we need to. If we paid any extra off the advances we wouldn't be able to get at this money (not that we should need to).

getthebalance

Hi Happier me and redped,


Thanks for your replies. I did think it might be the one with higher rate to OP first, but great to get people's opinions on this.


I'm not sure what rate it will go to at the end of the fixed term. That's my next bit of homework.


getthebalance