18 Jan

Low base rate boosts capital repayments scheme

Low base rate boosts capital repayments scheme

Homeowners with mortgages from the Co-operative Bank and Britannia can take advantage of low interest rates with additional capital repayments.

With the Bank of England base rate remaining at 0.5 per cent, customers are being offered the opportunity to make additional repayments of up to 50 per cent without penalty.

Recent figures from the Co-operative Bank show an increase in the number of customers making mortgage overpayments since 2008.

The number of customers making overpayments has increased by 28 per cent, and there has been a 23 per cent increase in the amount overpaid.

Following a successful pilot in 2010, the scheme will be separate to the normal overpayment scheme, reducing the outstanding balance of the mortgage.

James Hillon, head of mortgages at the Co-operative Bank said: "As a responsible lender we are keen to offer customers the opportunity and flexibility to take advantage of the low interest rate environment."

However, people should be prepared for a potential rise in the base rate, advises moneysupermarket.com.

The price comparison site warns that pressure on the Bank of England to raise rates could see the base rate increase in the first half of 2011.ADNFCR-1222-ID-800348563-ADNFCR

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