Are you considering making mortgage overpayments? Here’s what to consider.
If you can afford it, there are many advantages to overpaying your mortgage, such as:
– Becoming a step closer to being mortgage-free
– Reducing the amount of interest you owe
– Lowering your loan-to-value ratio (LTV).
However, before you make overpayments it’s vital to check the following:
– Is there an early repayment charge (ERC)? Many lenders allow borrowers to pay off 10% of the mortgage balance each year without a fee, but you must double check the terms of your deal.
– Do you have other debts that you should settle first?
– Would it be more beneficial to place your extra cash elsewhere, such as a savings or pension pot?
Your home may be repossessed if you do not keep up repayments on your mortgage