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UK repaying more debt than borrowing in 2009

UK repaying more debt than borrowing in 2009.
Should you join them and pay off your mortgage early? That’s what many are doing in an order to get there payments down while mortgage rates are low.

mortgage overpayment

According to a report from the Bank of England “homeowners are paying back more on their mortgages than home buyers are borrowing” this is for the first time in 15 years, this is quite a change in direction compared to a few years ago

So is repaying your mortgage for you? If you are fortunate enough to have excess cash and you have no outstanding credit card charges, it makes no sense putting it in a saving account. If you do have an outstanding mortgage, with the rates being so high then make it work in your favour. Many mortgages allow for an overpayment each month and this in effect becomes a better option as a savings account in the current climate.

Another advantage for you if you choose to overpay your mortgage is the loan-to-value ratio is reduced. Some people overpay because they hope that, by increasing the amount of equity in their home, they will have access to more attractive home loan deals when they come to remortgage.

Some lenders will limit the amount of overpayment, so its worth calling your lender before you make any decisions. You may also want information on whether the overpayment can be recalled for a future need or crisis. Without the ability to withdraw an overpayment, it may make the decision a lot more of a risk.

posted by Zane in Lending,Mortgage,Recession and have Comments (3)

3 Responses to “UK repaying more debt than borrowing in 2009”

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