Overpay which mortgage?

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    Overpay which mortgage?

    Hi All. We have a BTL interest only mortgage @ 3.88% on rental
    We also have a interest only mortgage on our residental house @ 2.05%
    If miraculously we have money to overpay , which should we choose?
    I thought 3.88% as higher interest , wife says 2.05% as its our residence and leave more owing on rental so maybe less CGT?
    TIA for any answers

    #2
    I don't think your mortgage has any bearing on CGT.

    Even taking 40% tax relief off 3.88% is more than 2.05%, so I'd say the BTL is the one to overpay.

    Comment


      #3
      Ok thanks. We thought overpaying on the rental increases the profit ie more CGT

      Comment


        #4
        CGT is charged on what you get for a house versus what you paid for it. Whether you have a mortgage to pay off or not is immaterial.

        Comment


          #5
          Thank you. Everyday,s a school day

          Comment


            #6
            I would always think it's best to pay off your own mortgage first. We pay capital and interest on our own mortgage and then interest only on our 5 buytolets Only three more years and our own mortgage is paid off. Will then start paying the buytolet mortgages off.

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