Banking group to encourage mortgage overpayments

Consumers who have taken out mortgages with the Lloyds Banking Group are to have a greater opportunity to overpay on their loans.

The organisation is launching a scheme that will enable customers - including those with luxury homes in Kent - who have a variable-rate product to overpay by up to 20 per cent with no financial penalty.

Set to last for a year, the initiative is being promoted as evidence of the firm's commitment to helping people gain maximum financial advantage of the current low interest rates.

This month, the Bank of England once again voted to keep the base rate at 0.5 per cent.

Stephen Noakes, commercial director of mortgages at Lloyds Banking Group, said: "With mortgage rates at an historic low, there has never been a better time for the majority of people to overpay their mortgage."

He added that customers have the choice to make the most of the current financial environment and they are behaving "very rationally" at present.