05:26 08 January 2014
Presently a fifth of the mortgage holders in the market pay too much their mortgage. The benefits are experienced right away but overpaying only works if you can afford to. Otherwise, you might end up impoverishing yourself.
The Bank of England has speculated that housing interest rates are set to rise. With the housing trend looking stronger by the day, it is a definite that it will improve economic growth.
If you are going to seize full advantage of the low-low interest rates, you should do so before they rise. Mortgage experts recommend that more and more people should overpay their mortgages so as to pay less interest and pay it quicker.
Santander Mortgages reported that 19 percent of the mortgage holders in the market overpay monthly. 6 percent pay annually and 9 per cent do so in a sporadic and impromptu manner.
Exploring reasons why you should overpay the mortgage
There are very many benefits that accrue to overpaying your mortgage. One of them is clearing your mortgage quickly. Another is that saves you a lot accumulated interest. In addition, it makes it easier for you have to remortgage the house. A lot of homeowners are getting on the overpaying bandwagon precisely because of the benefits offered above.
If you have some extra cash lying around, you should take it upon yourself to injecting more of it into paying your mortgage rather than your savings. The reason is simple: it allows you to cover your mortgage faster. Rates on savings accounts are very low at the moment and the way it is looking they might end up getting scrapped entirely. So why not divert your funds into mortgage and do away with high interest payments.
The rates have been constantly decreasing this year and it is imperative that homeowners exercise discretion while overpaying their mortgage in order to get the benefit of the experience.
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