# Which mortgage (tracker/variable) to pay off soonest?



## kibby (22 Sep 2010)

I got married late last year:

My mortgage was a 25-year 0.75% tracker, which has 16 (about €75k) years remaining. I have the house rented out now, and going on advice seen elsewhere in AAM am keeping a low profile with my bank on the matter.

My wife's mortgage is a fixed and between our home (previously hers) and a site she bought in her home county she owes about 200k.

Before marrying my basic repayment was €440 per month, which I've been overpaying by €880 for the last 3 years. At this rate my old mortgage will be repaid in about 6 years.

My question is, should we be attacking her large mortgage or polishing off my tracker?


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## millieforbes (22 Sep 2010)

the large mortgage is on a fixed rate? there may be a penalty for breaking this


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## dmos87 (22 Sep 2010)

If it were me, I would probably be trying to get the larger mortgage down. 

That way, worst case scenario, a mortgage of 440 euros PM is completely do-able should you both find yourselves out of work. 

It just makes sense to get the larger mortgage down as there is obviously higher interest.


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## RMCF (22 Sep 2010)

Its a no-brainer.

Go at the big one.


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## Mrs Vimes (23 Sep 2010)

*Do not be overpaying the tracker mortgage.*  1.75% is ridiculously cheap money and you would get a far better return saving this money in a deposit account.

Also, this mortgage interest is allowable (75%) when calculating your income tax from the rental property.  Add this benefit into the equation and it becomes clear how daft it is to be paying off the tracker any faster than you absolutely have to.  It is in general a bad idea to borrow to invest but when the tax advantage is so enormous it becomes a very very good idea.

I would save the "spare" money in the highest rate account you can find (there is a keypost on AAM) and once the fixed rate ends pay a lump sum off the wife's mortgage.  You could time the investment to mature at the same time as the fixed rate ends.

Sybil


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## niceoneted (23 Sep 2010)

Save you money until the faxed rate is finished and then pay off a lump sum. You will be penalised otherwise for paying money of a fixed mortgage.


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## kibby (23 Sep 2010)

Yikes! Thought I was being smart getting rid of the tracker. The idea of only having one mortgage was appealing. 
I took out the tracker in 2001, hence I don't have TRS any more: if I contact my lender (Ulster Bank) for a certificate of interest, would it alert them to the change of use of the house?

In any case, I think I'll get in touch to reduce my repayment to normal. Thanks very much for the advice every one!


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