Abacus Daily Debt News

Mortgage overpayments ‘have long-term benefits’

Making overpayments on mortgages is one method homeowners can use to improve their debt management, it has been suggested.

According to Halifax, overpaying by £100 per month on a £150,000 mortgage at a variable rate of five per cent can help reduce the amount of repayment needed by over £22,000 and cut the mortgage term by four and a half years.

Managing director of Halifax Financial Services Karen Crowshaw urged borrowers to seek the opinions of a personal financial advisor in order to help them improve their finance management in the new year.

"By making a few small changes today and seeking the appropriate advice, you could make some significant financial gains in the future," she explained.

Finance expert David Kuo recently warned against taking a mortgage payment holiday, stating that doing so can cause borrowers to fall into even greater debt in the future as they will face a bigger interest bill once they resume payments.

By Tom Musk