How much can people save by overpaying on their mortgage?
Of course, the amount people can save depends on how much they put in, the interest rate they pay, and the size of the loan.
In one example, Ms Howard said: “Adding just £50 a month to a £200,000 mortgage debt (at a rate of four per cent over 25 years) would save you £9,800 in interest and the term by a year and 10 months shorten. If you could expand to £100 a month, you’d save over £18,000 in interest and shorten the term by three years and five months.”
Chris Schutrups of The Mortgage Hut gave another example: “If you had a £250,000 mortgage over 35 years and made a monthly overpayment of £200 a month, that would cut the term by 11 years and you would be £91,546 Save £ on mortgage interest – assuming a five percent rate.”
While Alastair, entrepreneur and founder of The Calculator Site, added: “If you have a £150,000 mortgage with an interest rate of three per cent and a term of 25 years, overpaying £50 a month could save you around £9,000 save interest over the life of the loan and shorten the term by four years.”
CONTINUE READING: Interactive map shows where house prices are falling the most
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