Which mortgage is more expensive please?

krissy08

This is quite an embarrassing question. I have 2 mortgages within my mortgage as I recently took on some additional borrowing. The first part 103,000 is on a tracker of 0.89 above base rate. While the additional borrowing of 50,999 is on a different tracker currently at 1.74%.

I can overpay which I would like to do-and I have been given 2 account numbers with a choice of whichever I want to top up.

Please can you help me-which should I be topping up.

P.s I feel like there should be a calculator somewhere. Thanks in advance.

Typhoon2000

The one with the higher interest rate - the second one.

getmore4less

Probably should not be overpaying either of them and looking for savings at a better rate(net).

base+1.79 should be matchable and it keeps you flexable having the cash.

if mortgages go up it is likely savings will as well but as long as you don't lock your savings you can always use them to overpay.

krissy08

Thanks guys

I suspected that the 50,000 advance cost more but as it was half the value of the other mortgage it got confusing.

wow- I never thought about it this way getmore4less, so I am better locking the money away in a savings account with better interest than overpaying?

Is this always the case in this sort of scenario-I thought by reducing my interest rate on the overall mortgage daily I was saving myself heaps in future interest.

More explanation welcome.

getmore4less

Sticking money in savings gets you heaps more interest.

A long as the interest you are getting is at least enough to cover the interest you are paying saving keeps the cash ready to overpay or spend(on that emergency you hope never happens).

You can certainly better the mortgage on some of the current account if you can be bothered with the money shuffling.

as trackers I would err on the side of caution and look for savings that will track or are a good enough rate to still be better with at least a 0.25% mortgage rise and preferably closer to 0.5% for more safety margin.