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    • TP78
    • By TP78 14th Mar 17, 11:04 AM
    • 3Posts
    • 1Thanks
    Which mortgage to pay off?
    • #1
    • 14th Mar 17, 11:04 AM
    Which mortgage to pay off? 14th Mar 17 at 11:04 AM

    I don't know how to calculate which of my 2 mortgage products I should overpay.

    Mortgage 1 has 27 years outstanding at 1.74%.
    Mortgage 2 has 18 years outstanding at 2.14%.

    Does the amount outstanding on each mortgage matter? If yes, mortgage 1 is circa 3 times larger than mortgage 2.

    Any help please?

Page 1
    • juststuff123
    • By juststuff123 14th Mar 17, 3:35 PM
    • 214 Posts
    • 633 Thanks
    • #2
    • 14th Mar 17, 3:35 PM
    • #2
    • 14th Mar 17, 3:35 PM
    Hi There TP

    The general rule of thumb is to pay the debt with the highest interest first.
    NEW GOAL Mortgage Balance 0k & 50k Savings by Feb 2020
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    • rasputin_thorpedo
    • By rasputin_thorpedo 14th Mar 17, 8:39 PM
    • 402 Posts
    • 2,803 Thanks
    • #3
    • 14th Mar 17, 8:39 PM
    • #3
    • 14th Mar 17, 8:39 PM
    Hi TP

    JS123 is correct on a purely financial basis

    However, I am big on promoting mental health and mental progress. Is having two mortgages giving you a problem mentally? Would you prefer just one payment each month?

    In that case I would suggest killing off the smaller mortgage first and then focussing your efforts on the one with the higher interest rate.

    Both your rates are low, my friend, and to be fair the 0.4% difference - well, depending on the value of said mortgages, that might be peanuts.

    So take a balanced look. And choose whatever makes sense for you with that balance.

    Good luck,

    Man vs Mortgage
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    Baby Step 2 - Pay off all debts except the Mortgage - 9,326 to go
    Baby Step 3 - Save 6 months of expenses into full Emergency Fund - 4,300 to go

    Baby Step 4 - Put 15% into Pension
    Baby Step 6 - Pay off the Mortgage early
    Baby Step 7 - Live like no-one else
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