Mortgage expert explains how to use £100 to save at least £25,000
manchestereveningnews.co.ukWith the Bank of England holding interest rates at 5.25%, homeowners are feeling the pinch when it comes to their mortgage payments, but a money expert has explained that paying as little as £100 extra a month could save you thousands in the long run.
Tom Blake, Director of Money Saving Guru, said overpaying your mortgage can help ease the financial burden overall, potentially saving you between £25,000 and £60,000 and cutting your mortgage term anywhere between 1 to 6 years.
Tom said: “Even just £100 extra a month can have a significant effect on your mortgage costs. And the more you pay, the bigger the overall savings you can potentially make and the closer you come to owning your home outright.” This tip works because you end up reducing the amount of money you have to pay in interest, which can build up over the years.
But by making overpayments, you can cut down the extra cash you need to pay and reduce the length of your mortgage term. "Say you have a £200,000 mortgage at a 5% interest rate with a term of 25 years, an overpayment of just £100 a month can save you approximately £24,500 in interest and shorten your mortgage term by over 3 ½ years.
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