Mortgage Overpayment - Rental property or own home?

KennyH1

I have a rental property with a mortgage of £89k (valued at £145k) on a fixed rate of 2.75% for another 2 years. My house also has a mortgage of £188k @ 1.5% for another 3 years. I currently overpay both mortgages but am considering whether to pool the overpayments onto just one of the properties. Would it make sense to do this on the rental property as it has the higher rate? Or would not overpaying either and putting the money in a savings account make more sense?

K_S

@KennyH1 From a money-savings point of view -

1.5% resi mortgage - given current savings rates available ( https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ ) you'll probably save a bit of money by putting spare cash in best buy savings accounts rather than overpaying.

2.75% BTL mortgage - assuming you pay sufficient income tax to earn a 20% tax credit when you do your annual tax returns, the interest rate you're paying is effectively 2.2% (hope I've got my maths right!). Putting it in savings vs overpaying probably comes out similar at current rates.

KennyH1 said:

I have a rental property with a mortgage of £89k (valued at £145k) on a fixed rate of 2.75% for another 2 years. My house also has a mortgage of £188k @ 1.5% for another 3 years. I currently overpay both mortgages but am considering whether to pool the overpayments onto just one of the properties. Would it make sense to do this on the rental property as it has the higher rate? Or would not overpaying either and putting the money in a savings account make more sense?