Pay off second mortgage or put in savings?

I have a $9,600 second mortgage at a fixed 6.0%. I also have about 40k in savings that is only earning 3.75% (savings account). I know it is important to build equity/savings, however, given the discrepancy in rates should I just take out $9,600 from savings to pay off the 6.0% loan? I do realize that homeowner tax breaks result in my second mortgage technically being less than 6% (while compound interest on my savings also plays a role). I have heard that if the interest rates are comparable that it is best to leave in savings in order to build wealth. My first mortgage is $150k and is fixed at 4.25% for 5 more years, so I would hope to start paying that down, if possible. Thanks for any feedback.

I would pay down the 2nd mortgage- the interest you earn is getting taxed, so the deduction you get really is not that effective all things considered.

I would also pay off the second mortgage in your situation.

I have a similar question, only in the Bay Area.

I have a 1st mortgage of 415,000 at 5.625% and a 2nd mortgage of 75,000 at 8.025%.

If my wife and I were to pay extra to either loan, either a little bit extra each month or as a lump sun (we currently pay an extra $50/month on each towards principle)...which loan should we pay down first? Higher interest or bigger loan?

Thanks :)

Oh, and both are 30 year fixed with no pre-payment penalty...

Higher interest.