uSwitch: Tracker mortgage holders dissuaded from base rate benefits

Date:Friday 12th December 2008
Author: Susanna Kavka

Tracker mortgage holders could save as much as £16 billion if they use the base rate cut to overpay their mortgages, uSwitch has stated.

But the switching and comparison website also found that more than 230,000 people feel that their providers made the overpayment process so daunting that they have not done it.

uSwitch's research found that the three million tracker mortgage customers in the UK could make a £9 billion saving over the coming year and £16 billion if they overpay for the mortgage's entire duration.

For the fifth of tracker mortgage holders (616,350 people) who are now overpaying by as much as £260 monthly, interest could be cut by £26,122 and nearly nine years could be slashed from the mortgage term.

Louise Bond, personal finance manager at uSwitch, urged mortgage holders to overpay if they could as this would bring long-term benefits.

In November, uSwitch reported that 16 major mortgage lenders had relaunched their tracker products.

The average rate was found to be 5.24 per cent, while the month before it had been 6.27 per cent.