From This is Money:
The official cost of borrowing is already at a historic low of 1.5% and millions of borrowers are enjoying reduced repayments on their home loans as a result.
But if you kept your repayments at the same level they were before the savage rate cuts, you’d be making substantial overpayments without busting your budget.
– Has your mortgage been cut?
Borrowers can save themselves thousands of pounds in interest and shave years off the life of their mortgages by making these painless, regular overpayments.
More than 27,000 Lloyds borrowers have asked to overpay in the past few months and the bank is now writing to its tracker and variable rate customers telling them how to overpay.
HSBC is writing to 30,000 of its tracker and variable rate borrowers giving them illustrations of how much they could save by making small overpayments.
It says a £100-a-month overpayment on a £150,000 mortgage with a tracker rate of 3% would reduce your mortgage term by four years…