Some people are paying 'silly money for their mortgage'

Date:Monday 14th September 2009
Author: Max Freedman

Many people on tracker mortgage deals are paying next to nothing in monthly repayments, but are not taking full advantage of the situation, says an industry expert.

Catherine Hearnden, director of MyMortgageDirect, pointed out that people on a tracker mortgage have felt a huge benefit from the low base rate, but she is frustrated that more people have not switched to repayments.

She advised that people can also overpay on some types of mortgage deal too, but what people should not do is only pay off the interest.

"The rate has gone down and the amount they are paying out has gone down, but they haven't taken advantage of that to convert to repayments," she said.

Ms Hearnden claimed that many people have approached her and said that they will only begin repayments when it becomes affordable for them, but she commented that the present time is probably the most affordable that rates will ever be.

Last week, Halifax published statistics indicating that the average family now spends 29 per cent of their monthly disposable income on mortgage payments, which has dropped from 48 per cent in the third quarter of 2007.