which mortgage to overpay on?

Poppy3008

My OH and I have two mortgages (one in my name, one in his). Mine has an outstanding balance of about £114,000 at 3.89% where as his is £210,000 at 1.98%.
The LTV of mine is about 58% and his LTV is 84%.
I am due to re-mortgage next year (though now self employed so not sure what I will get offered) - OH in two years as only just bought the house (which we live in).
So my question is which one should I focus on to overpay? Highest interest but lowest LTV? Or highest balance, highest LTV but lowest interest?
I would like to do both but only one I think should be given a priority until we are more stable financially.
Thanks

daisy_1571

Hi Poppy

Just a couple of points which you have probably already thought about.

I am assuming you have some savings before you think about overpaying ? Just that wee comment about your finances not yet being stable - no point overpaying all your money and being derailed by the boiler breaking down this winter etc.


Heres my thoughts FWIW
Your interest a month is actually a little bit higher than OHs due to the larger interest rate even though the amount outstanding is so much lower. You are already at the best LTV for most mortgage providers whereas OH is quite far from his next better rate - either another 4% or another 9% depending so if you have enough as an overpayment to bring it down by that percentage then throw it all at his till his remortgage.

If you are keeping finances separate, (I note you say you want to overpay but that may just be figure of speech) then if it's only your money I would say overpay your own. Then if the worst happens (not suggesting it will but a lot of relationships do break down) at least you will have the benefit of your hard work.

I think that may be why you are finding it hard to decide which to overpay - there's a lot of '6 of this, half a dozen' of that so it will perhaps be the other factors that will make the difference for you deciding.

If all else fails, whilst I agree it's satisfying with a larger o/p, nothing wrong with halving your over payments between them till you decide.

Good luck and well done

Daisy xx

Poppy3008

Thanks Daisy. We do have joint finances - its just I manage it all! I thought it might be case of 6 of 1 half a dozen of the other type of thing.
We have an emergency fund (as indeed the boiler in my rented flat did break last week, to be replaced tomorrow!) and I do not want to diminish the savings any further in case something happens to our home.
Thanks for the reply - just helps having another pair of eyes on it.
Cheers!