Mortgage holders 'starting to overpay'

Mortgage holders whose interest payments have fallen are increasingly opting to overpay in order to save more cash in the long run, it has been stated.

Head of mortgages at finance website moneysupermarket.co.uk Louise Cuming noted that the latest Bank of England figures on mortgage debt showed this to be falling, something she said was a direct result of people paying above the minimum on their home loans.

This did not just mean paying less interest overall on the mortgage, she commented, stating: "You increase the amount of equity in your home, meaning when it comes to remortgaging your property, you can find a better deal."

Commenting that lenders have become "obsessed" with equity, Ms Cuming said those householders with more of it could get much better deals.

At the end of February the total level of debt secured on homes in the UK was £1,227 billion, according to figures from Credit Action.