Lloyds bank encourages mortgage overpayments
In a move which will catch the eye of many consumers in the UK Lloyds bank has revealed customers on variable mortgage rates will be able to overpay up to 20% of their outstanding mortgage loans over the next year. The idea is that more people could take the opportunity to benefit from low UK mortgage rates and effectively reduce their interest payments in the future. It is believed that up to £20 billion in additional finance charges has been saved by UK homeowners who have overpaid their mortgages in the last 12 months.
However, before you decide to make mortgage overpayments in the short to medium term it is vital that you take professional financial advice regarding your specific situation. It is worth remembering that once these overpayments have been made they will not be reversed by the mortgage companies in question and indeed mortgage holders will still be liable to minimum mortgage payments in the future. It may be that you have high interest debt such as credit card balances which could save you more money in the short to medium term if these were repaid in part or fall.
While mortgage overpayments may work perfectly for many people in the UK there may be other considerations to take into account for some homeowners.
Share this..
Related stories
Mortgages rates down and house prices up!
In a rather bizarre turnaround the announcement that the vast majority of UK mortgage providers will pass on the 0.5% reduction in base rates was followed by news that house prices rose by 1.9% during January. While there is some suspicion of the 1.9% rise in house prices there is no doubt that mortgage rates are falling although whether the better rates are available to the masses remains to be s...
Read MoreMortgage lending under serious pressure
The month of November has seen mortgage lending fall to record lows with a drop of over two thirds from the highs of 2007 with many experts forecasting further falls. Despite a window of opportunity only a few weeks ago in which the property market appeared to be consolidating this small light at the end of the tunnel has gone out. The UK property market now appears to be heading south faster than...
Read MoreUK Banks ignore government's mortgage protection scheme
Despite being launched in a blaze of glory a few months ago, the UK government's mortgage protection scheme only came into operation yesterday after significant delays and infighting. It was also revealed that some of the largest banks in the UK, despite helping the government create the scheme, have now refused to offer the service to customers.
You may recall the scheme gives thos...
Is Santander considering a float of UK businesses?
Santander, the enormous Spanish finance group, is considering a potential flotation of its UK operation which now includes Abbey, Bradford & Bingley and Alliance & Leicester. Central to these plans appears to be the possibility of acquiring up to 300 branches from Royal Bank of Scotland which has been forced to reduce its high-street exposure by the European commission. The sale of Royal Bank o...
Read MoreHSBC launches mortgage rate matcher
HSBC has set the cat amongst the pigeons in the UK mortgage market with the launch of a mortgage rate matcher. The company will match any mortgage rate down to 2.49% and fix the rate for an agreed term. However, for those with relatively small mortgages looking to refinance their debts there is the small fact of fees of up to £4700 attached to the mortgage matcher product. So is this really worth...
Read More