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What to do with your mortgage payment savings

While there is no doubt that mortgage rates in the UK have not been reduced in line with UK base rates we have seen a number of reductions over the last few months. As money becomes tighter across the UK more and more people are now wondering how best they can use this additional income which has been saved. So how can your reduced mortgage payments benefit you into the future?

The first thing to consider is can you actually afford to set aside the additional funds which have been saved as mortgage rates have fallen? If you can, there are a number of options to consider which include continuing to pay additional funds to your mortgage which will reduce your outstanding loan capital faster, reduce your interest payments and reduce the length of your mortgage. Alternatively, if you have outstanding credit card arrangements (which will probably be attracting a greater interest rate than your mortgage) or bank loans it may be worthwhile looking at using the additional funding available to pay off these debts quicker.

As the vast majority of personal loans and credit cards will be attracting significantly higher interest than those afforded to your mortgage there is probably more benefit in paying off any outstanding debts on these which will reduce your interest charges into the future.

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