4 Dec

Borrowers 'could take advantage of low interest rates'

Borrowers 'could take advantage of low interest rates'

People who can afford to overpay their mortgages while interest rates are at an all-time low should consider the advantages of doing so, an industry expert has said.

Bernard Clarke, a spokesperson for the Council of Mortgage Lenders (CML), commented that borrowers on variable rate deals could benefit: "If you've seen your borrowing costs reduce as a result of reductions in base rates, you may decide to overpay your mortgage in order to clear the commitment earlier than you anticipated."

He explained that mortgage payers can do this by continuing to make instalments at the higher levels experienced before the rate cuts came into force.

Research released by the Co-operative Bank Mortgages on December 1st revealed that there had been a 56 per cent increase in the number of its customers making overpayments on their loans.

The financial institution speculated that the low base rate of interest set by the Bank of England was encouraging consumers to shave more off their debts while credit is cheap.

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