Mortgage Query - Payment against differing interest rates

[Dan_1981]

Quick question that i'm sure is easily answered... unless I guess it's specific to our individual mortgage?

We have a value that is split over two subaccounts.

The two sub-accounts have differing rates.

When making repayments should they be split over both accounts or should they go to the account with the highest interest rate?

Ta

[Countdown]

It sounds like they're two separate loans (perhaps they've been taken out at different times?) even though they're secured on the same property.

If that's the case then the monthly repayment terms will have been set for EACH loan and that is the amount(s) you need to pay into each one. Any voluntary overpayments can be allocated to whichever account you like.

This might help

[Dan_1981]

Countdown said:

It sounds like they're two separate loans (perhaps they've been taken out at different times?) even though they're secured on the same property.

If that's the case then the monthly repayment terms will have been set for EACH loan and that is the amount(s) you need to pay into each one. Any voluntary overpayments can be allocated to whichever account you like.

This might help

Yes that's exactly what they are.

Sub 1 is our original mortgage from a previous house - we then ported that onto our new property as it has a favorable variable rate.

Sub 2 is the extra value we added on the new property.

That makes sense then, I was thinking of the situation where you have variable rates on different debts on a credit card and the highest interest ones are paid off first.