Millions of homeowners overpaying mortgages to reduce costs

Millions of homeowners are overpaying their mortgage to lessen the shock of higher rates when their fixed deal ends. Over £21.3bn has been overpaid this year, up 14% from last year. About 1.6m households will come off fixed deals next year, with rates predicted to rise to 5% by 2027. Homeowners can save thousands by reducing their mortgage balance before the new rate starts. Santander reported a 7.7% increase in one-off overpayments. Overpaying can reduce monthly repayments or shorten the mortgage term. Homeowners can also consider offset mortgages or earn interest on savings before overpaying. 

The Times (04/12/2023)