Mortgage holders advised to overpay

Date:Thursday 22nd January 2009
Author: Max Freedman

People whose mortgage rates have fallen as a result of cuts to the base rate have been advised to make overpayments if they can afford it.

Speaking as Lloyds TSB announced that borrowers are increasingly requesting to make overpayments, Lloyds Banking Group member Cheltenham & Gloucester, which partners the lender for mortgage provision, said it was wise to do so if it is financially feasible.

Cheltenham & Gloucester spokesperson, Stephen Noakes, said it was a "smart move" for people who could do so, adding: "Not only can it trim years off your mortgage term, but with house prices falling, overpayments will help to protect the equity in your home."

Lloyds TSB said that in November it received 7,000 overpayment requests.

The figure was more than 12,500 in December and 7,900 such requests were made in 2009's first fortnight.

Lloyds TSB and Cheltenham & Gloucester have already reduced their rates in line with the base rate falls.

Mr Noakes said that with mortgage rates below their ten-year average, it is a good idea to take out a long-term fixed-rate deal.