Both loans are variable? So the 4% loan will always be 1.5% higher than the current 2.5% loan, correct? If paying off sooner is what you want, pay the higher rate loan first. It's pretty similar to choosing a rate of return, if the two banks I am consider are both guaranteed (by my government, for example) why would I choose to get 2.5% when I can get 4%?
A simple example - I owe 1000 at 4%, 2000 at 3%. Clearly, the 2000 has a higher cost, 60 per year vs 40. But. For a moment, pretend the 2000 is two loans, 1000 each, both at 3%. So, now 3 loans, 1000 4%, 1000 3%, 1000 3%. Now, it's really clear, the 4% should be the priority. In my opinion, one should view money as the annual cost per thousand (i.e. the rate) to avoid confusion. Else, a 2% mortgage suddenly feels more urgent than an 18% credit card.