With interest rates still at an all time low but with the possibility of increases in interest rates likely over the next 2 years many will see great advantages in either being able to repay their mortgage early or at least make overpayments towards the mortgage debt.
No one is suggesting that you should put yourself in other financial difficulties by overpaying your mortgage but by making additional payments you can reduce considerably the amount that you will eventually pay to your lender. For example, if you have a £100,000 mortgage taken out over a 25 year period with an interest rate of 6%, an overpayment by £100 per month could save you £26,892 and knock 6 years and 4 months off the life of your mortgage.
If you are on a fixed rate or tracker mortgage then there may be an early redemption penalty if you pay the mortgage off completely or go beyond permitted overpayments. We recommend you go back and read your mortgage agreement carefully and make the necessary arrangements to avoid any additional charges.
Equally if you have very heavy credit card debts on extremely high annual percentage rates, it would probably make better sense to repay those rather than overpay on your mortgage.
You can talk to us about your mortgage conditions and the way in which repayment is dealt with at the Land Registry, or discuss your circumstances with a local accountant. This might particularly be the case where you are utilising a buy to let mortgage and there are tax implications.
For further information please contact Mark Ollier on 01297 626950 or email firstname.lastname@example.org