Should I pay off mortgage or loan?

razoni

Hi
Me and my girlfriend bought a house in January 2015. We took out a mortgage of 104,000 and a loan of 10,000 as the house needed lots of work doing. We finished the work in October and are now organising our finances.
The mortgage is over 25 years and is at 2.9 fixed for 5 years.
The loan is 3.7 and that is also over 5 years.
The house has been revalued at 135,000.
We will want to move possibly with the next 3 years so won't go past the fixed rate mortgage.

What is the best way to make sure when we come to sell this house we will have the most extra money? Pay more off mortgage or loan? We both earn around 30,000 per year so can afford to pay more off.

Thanks for your help.

AnotherJoe

Loan is higher rate so pay that off first. It will also be "psychologically" better since if you pay off the mortgage you'll still end up with a mortgage and a loan rather than have got rid of the loan.

Debtslayer

Pay off loan first and then once you've done that you could start making overpayments on your mortgage
You say you'll be looking to move before your fixed rate ends? You will need to check what early repayment charge will be if you do, you may find yourself better off waiting another 12 months until the 5 year fix ends

razoni

Great thank you all for advice. I'll look at the early repayment charge and maybe put off if costs a lot and save a bit more thank you.