Paying your mortgage off early is considered a great investment and overpaying could help you save, according to a mortgage specialist.
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With inflation very low, wage increases cannot be relied on to reduce debt.
In the 70s and 80s inflation was high and borrowing made more sense because inflation reduced the value of the debt.
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But Halifax Spokesperson Paul Fincham revealed that nowadays there were no incentives to hang on to mortgage debt, particularly with the cut in mortgage tax relief.
He said: “Most lenders offer the ability on a fixed rate mortgage to overpay up to ten per cent a year.
“Generally paying more on top of your monthly minimum mortgage payment is a very good idea and even a small amount over the years will make a big difference and save you quite a bit in helping to reduce initial capital and paying off the interest.”
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Mr Fincham revealed that borrowers needed to check whether their mortgage was calculated on daily or annual interest, suggesting overpaying on a daily basis would save people significant amounts.
He also urged people to contact their lenders before contemplating early repayments as some enforced restrictions and charges for early repayments.<img alt=”copyright” src=”http://feeds.directnews.co.uk/feedtrack/adferocopyright.gif?feedid=844&itemid=18107467″ />
