How to pay off Mortgage early?

hi, we took out a 2nd mortgage of 30K in nov ' 04 (over 23 yrs) on top of original mortgage of 120K in '02 (over 25 yrs)

on a variable tracker rate.

looking into paying off the smaller mortgage.

The balance on the statement, is that the balance we owe if we were to pay it off now? or Does that include the interest from now until end of term? therefore balance would be less (HOPEFULLY).

i presume with the variable rate there would be no penalty for paying it off early?

1) If the tracker rate is low, you probably should put the money on deposit instead of paying it off the mortgage. See this thread.

2) The balance on your statement is the amount that you owe today. There might be a small increase depending on how often they actually add the interest to you your account. They don't "anticipate" interest. Have a look back at your statements since you took out the loan. You should be able to follow the drawdown of the money, the charging of interest and the repayments made.

3) There is no penalty for paying off a variable rate mortgage early.

thanks brendan,

we've made a decision to pay about 20-30k off the mortgage.

would it be better then to pay off the small one altogether or pay a sum of the larger one instead. (would this reduce the monthly outgoing then if interest rates increase).

Hi Julie

If they are charged at different interest rates, then pay off the bit with the higher rate.

What was the top up borrowed for?

If it was not borrowed to extend the house, then you are not getting tax relief on it. (You probably aren't getting it anyway - I find the rules to complex to follow)

If, by any chance, it was borrowed to invest in a business, you may get tax relief on the borrowing against the profits of the business, so you should pay off the bit that doesn't attract tax relief.