What should I do with a mortgage that is half variable rate and half fixed rate?
Q Half my current mortgage is on a variable rate and the other half is on a fixed rate of 4%. I have sufficient funds to clear one portion of the mortgage but which makes better sense? Should I pay off the almost zero interest as it will require less funds, or pay off the fixed amount as it is the most expensive monthly portion?
RH
A If it were me, I would pay off the half of the mortgage which costs the most each month so that means paying off the half, which is on a fixed rate. However, before you do that, check that there aren't any penalty fees for paying off early. If there are, you would probably be better off either waiting until penalty fees no longer apply or paying off the half that's on a variable rate.
Source: http://www.guardian.co.uk/money/2011/jan/04/mortage-half-fixed-rate-variable-rate
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