Mortgage Overpayments - Sub Accounts??

c3008212

Hi,

I am looking to apply overpayments to my mortgage starting next month and when I have been setting up my standing order I have the option to apply the overpayment to a particular sub account or all sub accounts. I have checked and I will not incur any early repayment charges as this is a standard variable mortgage at present.

Please can someone tell me what is best doing and why, given the following sub account setup?

Sub Account 1:
£5,181.12
Current monthly payment: £25.30
Rate: 3.99%
Period Length: 28 years 8 months

Sub Account 2:
£4,464.85
Current monthly payment: £21.80
Rate: 3.99%
Period Length: 28 years 8 months

Sub Account 3:
£91,046.79
Current monthly payment: £444.50
Rate: 3.99%
Period Length: 28 years 8 months

Thanks in advance.

spacedog

Given that all 3 sub accounts have the same interest rate there isn't really any financial reason to target 1 specifically. Just send the over payments to the whole lot and it will be spread proportionately over all 3. Saves having to remember to change the standing order when you wipe out the smaller accounts. If you are just wanting to reduce the number of accounts, just pay the smallest ones first. I.e. sub account 2 then 1 then 3.