Tracker mortgage borrowers wasting low-interest opportunity

| April 1, 2009 | 0 Comments
Tracker mortgage borrowers wasting low-interest opportunity

Many homeowners on a tracker mortgage are failing to take advantage of historically low interest rates by not making mortgage overpayments, research by Unbiased.co.uk has discovered.

More than half (56%) of UK consumers on a tracker mortgage are missing out on potentially taking years off their mortgage term by keeping extra cash in their pockets.

Only one in five (22%) tracker customers are making the same level of repayment as they were when interest rates started to fall.

Almost a third are using the extra money for day-to-day expenses, whilst 38% are putting it towards more expensive debt repayments.

Richard Winder, Unbiased.co.uk spokesperson, said: “Tracker and standard variable rate mortgage borrowers have watched interest rates plunge to record lows in recent months, presenting an ideal opportunity to pay down more quickly the amount of the outstanding mortgage.

“Such action would enable millions of borrowers to take years off their mortgage repayment term, or enjoy a greater level of repayment comfort down the line, should the recession begin to bite harder.”

However, he added that consumers who are using the extra money to pay off more expensive debt are making the right choice.

“We’re encouraged by the large number who are using their repayment savings to erode their more costly credit card and personal loan debts,” Winder said.

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