Consolidate top-up mortgage and stay as is

Age: 37
Spouse’s/Partner's age: 41

Annual gross income from employment or profession:
65,000 for 5 day week, soon to be reduced to 4 day week
Annual gross income of spouse: 52,000

Type of employment: e.g. Civil Servant, self-employed
Both private sector employed

In general are you:
(a) spending more than you earn, or
(b) saving?

Saving

Rough estimate of value of home 350,000
Amount outstanding on your mortgage:

Mortgage 109,381 1.8% interest rate (199 months remaining)
Top Up Mortgage 37,998 (we got this when we were building our house and underestimated cost. 2.29% (125 months remaining)


What interest rate are you paying?

Other borrowings – car loans/personal loans etc None

Do you pay off your full credit card balance each month? yes
If not, what is the balance on your credit card?

Savings and investments:

CU – 4000 approx
Hallifax 12,000 approx
Permanebt TSB 3000approx

Do you have a pension scheme? Yes 5% contribution Employer 10%
Spouse 3% and 3%
Do you own any investment or other property? no

Ages of children: 6, 3 and 9 months

Life insurance: yes


What specific question do you have or what issues are of concern to you?

We have two mortgages as above and are paying two life insurance payments on them. Would we be better off consolidating to one mortgage with one insurance payment and reducing the term? Would this be more efficient.
Thank You

I am going to guess that based on the rates we are talking about a pair of tracker mortgages? Have you investigated the likelihood of your retaining the coveted tracker rate if you were to consolidate?

It might be better worth your while investigating if you can get a better rate on your life insurance premium. If the insurance you have is from the same bank that extended you the mortgage it may not be the most favourable rate for you.

On the embedded question about shortening the term, as you are likely on a tracker or (less likely) a variable, overpayments will have the same effect as shortening the term, won't incur any penalties and they can be made without making any alterations to your mortgages so you don't have to renegotiate the terms and are very easy to set up.

If it were me I wouldn't consider any kind of consolidation. I'd just ramp up the payment on the smaller mortgage until it's paid off then direct that payment to the main mortgage.