Which mortgage first?

[jimmy7]

Bit of background:

Currently have two mortgages on the same property, one a smaller value circa £15k the other around £105k - both are the same term and interest rate.

We plan to start overpaying regularly rather than lump sums as previous, but wanted to understand which one to pay into first? The largest one seems to make sense but my other half wants to clear the smaller account totally.

Surely it makes most sense to reduce the largest total first as this contributes most to the interest? But being as the interest rates are the same, does it make a difference? Dont know if I am just being stupid to be honest - some clarity would be great!

[Countdown]

It makes no difference.

I'd clear the smaller one off first just to get rid of the paperwork.

[Sarnie]

jimmy7 said:

Bit of background:

Currently have two mortgages on the same property, one a smaller value circa £15k the other around £105k - both are the same term and interest rate.

We plan to start overpaying regularly rather than lump sums as previous, but wanted to understand which one to pay into first? The largest one seems to make sense but my other half wants to clear the smaller account totally.

Surely it makes most sense to reduce the largest total first as this contributes most to the interest? But being as the interest rates are the same, does it make a difference? Dont know if I am just being stupid to be honest - some clarity would be great!

It makes no odds to the interest being charged if the term and rates are the same............from an admin type point of view I'd probably pay the smaller one off first, either way the effect is the same.....

[jimmy7]

Great thanks.

[p1doc]

be careful you do not have early payment charge normally if go above 10% total as if you pay off smaller amount fully you could end up with charge but if you do like I have for similar mortgage pay evenly across both no charge

[Sir Bagalot]

I'd leave a £1 owing as well. Most mortgages allow you to make a call and get back the overpayments if needed. Leaving £1 on account means the account remains open