Low interest rates ‘help mortgages get paid off early’

Mortgage holders can cut their costs in the long run by taking advantage of the low base rate, an expert has said.

Council of Mortgage Lenders spokesman Bernard Clarke stated there is presently no “hard data” to show that people are paying extra not needed off their homeowner loans over and above the required monthly amounts.

However, he noted, the current situation of record low rates does create a situation that homeowners can take advantage of.

He advised: “You can do that by not paying the reduced rate but continuing to pay your mortgage at the level that prevailed before rates were cut.”

This will enable the mortgage repayments to end sooner than originally scheduled, Mr Clarke commented.

Earlier this week, the Co-operative Bank said its research had shown that there has been a 56 per cent jump in the past year in the number of people looking to save money by overpaying on their mortgages.

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