With low interest rates, the market is more suited to borrowers, rather than savers. The low rates offered on savings accounts are behind a spike in the number of mortgage borrowers overpaying their mortgages. Mortgage overpayments can potentially make greater financial sense than savings. With the interest rates set to be low throughout 2019, there has never been a better time to overpay on mortgages. Even if it is a very small amount each month.

For a £150,000 repayment mortgage over 25 years, at a rate of 2.5 per cent, your monthly repayments would be £673. Using Santander's overpayment calculator (www.santander.co.uk/info/mortgages/overpayment) you can see that If you overpay by just £10 a month you could save £1,140 in interest over the term of the loan and clear your mortgage six months early. If you Increase your monthly overpayment to £50 and you will save £5,230 and shave two years and three months off the mortgage term. Pay an extra £100 and you will save £9,485 in interest and be mortgage-free four years and three months early.

Most banks and building societies allow you to make overpayments worth up to 10 per cent of your total mortgage balance each year. On a £150,000 mortgage this would be £15,000 a year. Borrowers need to check the rules of their loan before making overpayments. Some lenders limit the annual amount a customer can overpay to 10 per cent of the loan. Exceed the limit and early redemption penalties could be payable.

If you would like to find out more about your options, please do not hesitate to contact us.