Mortgage holders 'should overpay while rates are low'

Date:Friday 28th May 2010
Author: Max Freedman

It is smart for mortgage holders to overpay on their home loans while interest rates are low, since there is a possibility that these costs may go up soon.

This is the opinion of spokesperson Darren Cook, who suggested lenders are currently easing their lending criteria and competing for a smaller amount of business.

He suggested the lower mortgage interest rates people are currently enjoying may have offered them a form of monthly windfall, but he claimed homeowners should not simply absorb this into their finances.

Mr Cook stated: "Mortgage revert rates as low as 2.50 per cent have meant borrowers should have taken the wise decision to overpay their mortgage."

In his view, the base rate may be increased soon as a result of a spiralling inflation figure and a rumoured rise in VAT.

The Bank of England's Monetary Policy Committee will make its next decision on the national base rate on June 10th.