Homeowners 'should try to overpay mortgages now that rates are falling'
Published On 8 February 2008
Despite the fact that interest rates have started to fall again, homeowners should continue to pay back as much as they can on their mortgages, an industry expert has claimed.Earlier this week, the Bank of England reduced interest rates to 5.25 per cent, offering relief to many of the homeowners on variable-rate mortgages.
However, financial experts at Charcol.co.uk have suggested that consumers who have managed to find the money to meet higher repayments over the past 12 months should consider continuing to pay this amount.
Katie Tucker explained that if people maintain "their mortgage payments up at the level they are now used to, they could reward themselves with an early finish to their mortgage".
In fact, the site calculated that a person who maintained the level of payment required when interest rates were at 5.75 per cent could pay off a £100,000 mortgage two years early.
Ms Tucker concluded: "For many people, the mortgage is what dictates when you can retire. By paying it off even a few years early it can make a difference to your quality of life not only because of age, but because of the money you free up to spend on other things."
