Homeowners should take advantage of the low base rate and overpay on mortgages, according to new advice.
More than half of all homeowners with tracker-rate mortgages are failing to take advantage of the low base rate and make overpayments, new research from Unbiased.co.uk has revealed.
Figures from the IFA website suggest that just 22 percent of borrowers are still making the same repayments as before the Bank of England began its successive rate cuts earlier this year. These borrowers have maintained the same monthly outgoings and will have repaid more than those whose payments will have dropped as a result of the rate changes.
Richard Winder, spokesperson for Unbiased.co.uk said that now is the "ideal opportunity" to clear mortgage debt by paying more than the required amount.
"Such action would enable millions of borrowers to take years off their mortgage repayment term, or enjoy a greater level of repayment comfort down the line, should the recession begin to bite harder" he commented. "Our initial research suggests most tracker borrowers are not taking this action, however we're encouraged by the large number who are using their repayment savings to erode their more costly credit card and personal loan debts."
The research revealed that 38 percent of customers with a tracker-rate mortgage are using the money saved to pay off other debts.
