Why should I pay off my mortgage early?

Paying off your mortgage early is one of the best decisions you can make. If you have a £100,000 mortgage taken out over a 25-year period with an interest rate of 6%, overpaying by £100 a month could save you a healthy £27,039.37 and knock more than six years off the life of your mortgage. Some Lenders offer flexible or 'offset' mortgages that recalculate your balance daily. The effect of this is to help you pay off your loan faster and you can take advantage of this by paying extra every month. Many High Street lenders have given ordinary loans flexible features although some set minimum or maximum amounts that you can overpay.

Is overpaying right for you?

It may not be a good idea to repay some of your mortgage if you have heavy credit card debts on regular (and high) APRs - mortgage loans are still the cheapest around. It doesn't make sense to repay a mortgage at 6% if you have credit card debts where you could be paying 15%-20%. There may also be early repayment penalties on your current mortgage. There may be other ways to raise capital that are more suitable to you. Your adviser will recommend the most suitable product for you according to your needs.

The Financial Services Authority does not regulate secured/unsecured loans and credit cards.

Related Links

- Offset & Flexible Mortgages
- Debt Consolidation
- Secured Loans
- Unsecured Loans