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Rush to repay loans while rates low
Wednesday May 19th 2010
More people with variable rate mortgages are rushing to pay extra each month in an attempt to save money and get out of debt quicker.
Research from Lloyds Banking Group found that the amount of customers overpaying each month went up from 7% in 2008 to 14% in 2009.
This may be due to people taking advantage of current low interest rates, and a fear that mortgage repayments could soar when the rate goes up.
Those that find they cannot pay a sufficient amount of their mortgages back, because they are struggling with the after-effects of the recession, may want to consider getting help in the form of Mortgage Payment Protection Insurance (MPPI), before their monthly repayments get even steeper.
The low interest rates have significantly reduced average monthly repayments, prompting customers to up their overpayments to about £336.
Repayments on a mortgage of £100,000, with 3.5% interest, have been reduced by about £275, and if someone with a mortgage of this size overpays by £50 a month, they could save themselves £7,610 in the long term.
However, despite more people overpaying, the amount they are actually paying is less than it was before interest rates started to fall, Lloyds said.
Mortgage Payment Protection - If you're looking for great value, high quality with added benefits you've found it.
Copyright © Press Association 2010
If you're looking for great value, high quality Mortgage Payment Protection Insurance with added benefits you've found it.