'Repay mortgage faster' with overpayments

Date:Monday 29th March 2010
Author: Susanna Kavka

Making overpayments on a mortgage could help to dramatically reduce the amount of time it takes to pay off the deal, it has been stated.

According to the mortgage specialists at Yahoo!, one the easiest ways to be clear of debt faster is to make small overpayments.

It explained that for homeowners with a mortgage of £100,000 and an interest rate of 3.5 per cent on their deal, paying off an additional £50 a month would see them complete their mortgage three years and six months sooner than if they had stuck to the agreed payments.

In addition to this, the amount that consumers save can be big, as this level of payment will see a saving of £14,576.04 in total by the end of the loan, which is made up of £7,557.24 in saved interest charges and £7,018.80 in saved mortgage repayments.

For those looking to step onto the property ladder, HSBC has added a new fixed-rate mortgage with a rate of 2.99 per cent.