Mortgage overpayments rising

23 January 2009

Many thousands of mortgage holders have taken advantage of the falling base rate to overpay their mortgages, the Press Association reports.

Lloyds TSB has reported that more and more of its mortgage customers have been overpaying their mortgages – with over 7,000 overpayment requests received after the Bank of England’s Monetary Policy Committee (MPC) decided to cut the base rate by 1.5% in November, and 12,500 more requests after December’s cut of 1%.

The bank, which also lends under the Cheltenham & Gloucester brand, has received 7,900 mortgage overpayment requests in the first two weeks of January alone, and expects to see the numbers grow further.

“The falling base rate gives homeowners an excellent opportunity to overpay their mortgage without actually spending more than they’re used to,” said a mortgage expert for Think Money.

“This can deliver multiple benefits. Reducing the term of the mortgage, it can save them thousands in interest. And given today’s falling house prices, mortgage overpayments can reduce their chance of falling into negative equity as well.”

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Tags: mortgage, mortgage payments, overpayment, mortgage overpayment, pay too much, pay too much on mortgage

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