A large number of borrowers in the UK have the option of overpaying on their home owner loan or mortgage, yet do not take advantage of this opportunity, even though they may be saving regular monthly amounts in a separate deposit account with their bank. New figures from First Direct have shown that it could be beneficial for borrowers with a flexible home owner loan to make overpayments on their loan, rather than put their spare cash into a savings account. Based on average savings and loan rates, based on a home owner loan of £100,000 and a regular monthly saving amount of £300, a borrower could end up being £42,909 worse off after 25 years, if they save separately, rather than reducing their loan balance by an additional £300 per month.
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Benefits Of Overpaying Loans
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