We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Which mortgage should I pay off first?
ajmcarey
Posts: 1 Newbie
I have a reasonably competitive mortgage with RBS. There are 2 subaccounts.
1. Approx £74 000 outstanding (at 4% SVR), monthly fee £540
2. Approx £148 000 outstanding (at 1.1% + BoE base rate tracker), monthly fee £920
Both are planned to run for about another 15 years. I pay capital + interest on both.
Would it make sense to switch subaccount 2 to interest only and pay off subaccount 1 ASAP?
Thanks
1. Approx £74 000 outstanding (at 4% SVR), monthly fee £540
2. Approx £148 000 outstanding (at 1.1% + BoE base rate tracker), monthly fee £920
Both are planned to run for about another 15 years. I pay capital + interest on both.
Would it make sense to switch subaccount 2 to interest only and pay off subaccount 1 ASAP?
Thanks
0
Comments
-
What makes you believe you can switch a sub account to interest only?
Sounds more than unlikely in the current market.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Did I read right that OP wants to divert the capital payments going to sub account 2 to reduce the Bal on sub account 1. That way they pay less interest overall?
I think the correct question is can OP specify a split on what the capital pays off instead of the standard pro rata system.0 -
wannabeprudent wrote: »Did I read right that OP wants to divert the capital payments going to sub account 2 to reduce the Bal on sub account 1. That way they pay less interest overall?
I think the correct question is can OP specify a split on what the capital pays off instead of the standard pro rata system.
IS there such a thing?
normal is work out the sub account payment and add them together.
to change a contractual payment on an account would need the terms changing.0 -
getmore4less wrote: »IS there such a thing?
normal is work out the sub account payment and add them together.
to change a contractual payment on an account would need the terms changing.
Which ever way it is described the end result is the same assuming the term for both sub accounts are the same0 -
If RBS do allow you to go Interest only on the £148,000 part of your mortgage please do tell us and I will run the London marathon NAKED.
If you can overpay the part of the mortgage with the higher interest rate0 -
Love to see your generic pro rata equation.wannabeprudent wrote: »Which ever way it is described the end result is the same assuming the term for both sub accounts are the same0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.9K Banking & Borrowing
- 254.3K Reduce Debt & Boost Income
- 455.2K Spending & Discounts
- 246.9K Work, Benefits & Business
- 603.5K Mortgages, Homes & Bills
- 178.3K Life & Family
- 261.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards