overpay which mortgage?

turtleberg

Help! I have brain freeze. I have two mortgages and want to set up overpayments of 200UKP pcm. I cannot work out which is going to save me the most money, although there might not be much in it. Both mortgages are capital repayments, on fixed rates.

The big mortgage has a balance roughly 90,000, with interest rate of 2.19%.

The small mortgage has a balance roughly 35,000, with interest rate 2.44%.

Where do I put my 200UKP per month? Can anyone do the maths for me?
Thanks

getmore4less

For each £200 you save in pence per month

2.19% 36.50ppm
2.44% 40.66...ppm

needabed

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

25 year mortgages:

90000 over payment would be £11,362 saved
35000 over payment would be £7,709 saved

getmore4less

needabed wrote: »

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

25 year mortgages:

90000 over payment would be £11,362 saved
35000 over payment would be £7,709 saved

That does not answer the question asked.

If you think you save more by overpaying the £90k part you are sadly mistaken because those two calculations are incomplete.

turtleberg

Thanks getmore4less. That was my initial approach - but then I got hung up thinking about the impact (on total interest paid over time) of reducing the larger capital amount compared to reducing the smaller one.

If it's the simple calculation based on rates you have given, that is great. Thank you for the reassurance!

getmore4less

turtleberg wrote: »

Thanks getmore4less. That was my initial approach - but then I got hung up thinking about the impact (on total interest paid over time) of reducing the larger capital amount compared to reducing the smaller one.

If it's the simple calculation based on rates you have given, that is great. Thank you for the reassurance!

That's the simple calculation

There are other consideration like when the fixes finish what rate will they go to.

needabed

Any penalties for ending mortgage early, some can only overpay a certain percentage.

getmore4less

Won't be hitting 10% a typical ERC limit for some time with £200pm.

robatwork

All else being equal, pay the higher interest one

turtleberg

Thank you everyone for advice.