Switching to a mortgage deal that will permit overpayment could save homeowners thousands of pounds say market experts.
Most mortgage providers cap the amount of overpayment allowed, but some will permit excess repayments of up to ten per cent, say analysts.
Combined with the best mortgage rate, however, even small overpayments can produce big savings over the course of a mortgage.
And in some cases the savings will even allow homeowners to double their money – with homeowners who repay £10,000 more than scheduled able to cut the overall cost of their mortgage by £20,000, and clear their payments three years early.
“Most borrowers will have the ability to overpay their mortgage without incurring any early redemption charges, and some may not be aware of this,” said mortgage expert Ray Boulger.
“The most common amount which can be overpaid, without incurring early redemption charges, is ten per cent per annum, but some allow five per cent or unlimited overpayments, all of which allow a large chunk of the mortgage to be overpaid.
“However, borrowers must be aware of any conditions when overpaying as breaching any terms could result in a large penalty. My advice would always be to check with your lender before making an additional payment.”
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