Advice re what parts of mortgage to pay off first..

hs61

I have a mortgage which has 6 years and 4 months to go with a total amount left to pay of £30,012 with monthly payments of £427 at an APR of 2.5%

I halso have, for various reasons:(, 5 other sub accounts and they are all on interest only payments and all at 2.5%APR. They all have different completion dates and the details are below.

sub account 1
Balance £13,060, term 10 years, term remaining 1 year 9 month

sub account 2
Balance £6,947 term 12 years, term remaining 2 years 6 month

sub account 3
Balance £21,990 term 14 years,term remaining 6years 6month

sub account 4
Balance £20,419, term 20 years, term remaining 9 yrs 9 month

sub account 5
Balance £19,143, term 16 years, term remaining 9yrs11month

All the above interest only sub accounts come to approx £175 per month bringing my total monthly payments including my straight repayment part to approx £605 per month

My question is with me now paying an additional £1200 per month on top of my existing £605 is it better for me to pay this additional money to my main mortgage to finish it first, or pay off the sub accounts that are due to finish first?

Any advice/tips would be gratefully received as I will be able to continue these payments with a target of clearing all my mortgage debt at the completion of my main mortgage in 6 yrs and 4 months and just want to know the best way of achieving this in the most favourable way re interest charges;)
Thanks:D

amnblog

Is this with Halifax?

hs61

Sorry forgot to say it was with TSB
Thanks

amnblog

ask them if they can calculate the best option for you.

hs61

Tied that over the phone but usual we cant advise comments and you need to speak to a financial adviser were all I got.
TBH not got time for that so just wondered if anyone could offer a rough guide as to best options

Thanks...

getmore4less

All part are the same interest rate it should make no difference on the interest payable

timing might if not all on daily interest

Any other fees on each of the accounts? like closure fees


£111843 @ 2.5% paying £1805pm is 5 years 7 months
(if we get no rate rises)

To pay off in 6y 4m rate could be up to just over 6.5% more depending how long it takes to get that high.

Thrugelmir

Pay off the sub account with the shortest term remaining first. This would then give you maximum flexibility should your circumstances change.

As the sub accounts are all on the same rate of interest there's no actual advantage as to which you pay off first.

getmore4less

Thrugelmir wrote: »

Pay off the sub account with the shortest term remaining first. This would then give you maximum flexibility should your circumstances change.

As the sub accounts are all on the same rate of interest there's no actual advantage as to which you pay off first.

If flexibility is wanted should also look to overpay the repayment part that's at the same rate.

hs61

Thanks so no big difference paying the main mortgage off first then?
If not will just clear the ones with the earliest closing dates.

Thanks for input. Much appreciated.

JimmyTheWig

As has been said, if they are all on the same long term rate then it makes no difference in terms of interest where you pay off first.

But if you use the overpayments for other loans, what will you do with

hs61 wrote: »

sub account 1
Balance £13,060, term 10 years, term remaining 1 year 9 month

when it ends?

My gut feeling is to pay them off in the order that they are due.
So pay sub account 1 first, then sub account 2, then the main mortgage.