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HSBC urges customers to overpay on mortgages

23 January 2009

Over 30,000 HSBC customers on variable-rate or tracker mortgages are being written to by the company to help them understand the benefits of making overpayments on homeowner loans.

The lender wishes to encourage borrowers to take advantage of the 3.5 per cent drop in interest rates that has occurred since October.

It cited Council of Mortgage Lenders figures that indicate a typical tracker mortgage customer who took out a loan during this period can now save £218.08 per month, compared to when the loan was first taken out.

Commenting on borrowers of tracker mortgages, HSBC's spokesperson Martin van der Heijden said: "It is absolutely in their favour to make real use of today's historically-low interest rates. Overpaying their mortgage could reduce its term by years."

But homeowners must not become too reliant on the low rates as they must rise at some point, he warned.

Lloyds TSB and Cheltenham & Gloucester have reported that the amount of requests received to set up mortgage overpayments has risen since November.

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