Which should I overpay?

FTbuyer18

Hi, i owe 98000 on my mortgage at 2.39% fixed for 5years. I also owe 7800 on a Halifax loan at 3.44%fixed. 
Which should i overpay 1st? I'm thinking Halifax as higher interest, but unsure if with the mortgage being a higher amount the interest would be more on that?

Any help appreciated. Thank you.

TheAble

The loan. It's the interest rate which matters, not the amount outstanding. If say you have £5000 to put towards, then by paying the loan you are saving 3.44% on £5000 rather than the mortgage at 2.39% on £5000.

FTbuyer18

Ah right that makes obvious sense now! Thank you. 

enthusiasticsaver

As the Able said it is the interest rate which matters so the loan should be targeted with overpayments before the mortgage.  Getting rid of the loan asap also gives you more of your disposable income back to overpay your mortgage once the loan is gone. 

Disney_Princess85

As others have said, tackle the loan first then worry about the mortgage.

FTbuyer18

Thanks everyone will do just that.