Overpay mortgage

Overpay your mortgage is the new advice. While many customers saw the early May 2007 interest rate rise as a catastrophy, it need not be bad news for all mortgage holders, claims fool.co.uk.

Homeowners with variable rate mortgages will have suffered as Northern Rock, Mortgage Express, Barclays and Abbey Mortgages are poised to make adjustments to their policies but with 76% of borrowers holding fixed rate mortgages, the news doesn't immediately affect everyone.

Fixed-rate mortgage holders should capitalise on their good fortune that they are tied in to fixed repayments and, if possible, make overpayments.

David Kuo, head of personal finance at fool.co.uk, said: "By overpaying just £15 a month on a 5.25 per cent fixed-rate deal, homeowners would not only slash almost £4,500 off every £100,000 borrowed, but also cut the time to repay the loan by over a year."