can pay off mortgage, but....

snickpan

I have an interest only mortgage on my residential home (£145K) 4.2% interest, and an interest only mortgage 5.74% on a buy to let HMO (£120K). I'm in a position where I can pay one of them off, the HMO 5.74% mortgage, but it has 3 years left to run, and has a 3% early repayment fee, £3670. Is it worth a chat with the lenders, Kent Reliance, see if there's a better way out?

BikingBud

How much interest do you save by paying off?

By my reckoning @5.74% on £120k is costing you £574 per month so £20664 over 3 years + £120k = £140664

Whereas you to need to pay off £120k + £3670 ERC to clear it now

Can you get more than £20664-3670 after tax in interest over 3 years? - £16994

120000 @4.4% for 3 years will give you £16900 but you need to cover tax as well.

So 5.5% should cover that giving you £21242 interest before tax.

Do the same for your other mortgage and see what the broker might offer.