21 Jan

Bank reveals customers overpaying on mortgages

Bank reveals customers overpaying on mortgages

Lloyds TSB has said thousands of its customers are choosing to overpay on their mortgages following the most recent base rate cut.

The bank has revealed that since the reduction in the rate to 1.5 per cent this month, it has had 27,000 requests from customers to make overpayments on their mortgages.

It noted that this trend has also been seen - though on a smaller scale - in previous months, with 7,000 overpayment requests in November and 12,500 in December.

By overpaying, customers may be able to pay off their loans early.

Earlier this week price comparison website Moneysupermarket.com calculated that tracker product holders with monthly repayments of £1,000 could save as much as £16,000 and finish their repayments nine years early on the basis of maintaining the payment level.

The site based this calculation on a £163,000 tracker mortgage at a 5.49 per cent rate in October, which will now charge 1.99 per cent.

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