Base rate 'not being used to full extent'

Posted: 31 Mar 2009 12:08:09 GMT

Over half of homeowners with a tracker mortgage are failing to take the opportunity to make the most of the low base rate at present.

Research from financial advice website unbiased.co.uk has found that less than half of tracker customers are currently choosing to make overpayments to their mortgage since the base rate reduced their monthly outgoings.

Furthermore, 31 per cent of those not choosing to make extra repayments are using the extra cash to treat themselves or to spend on everyday items.

Such low base rates are one of the reasons buying property is beginning to look more attractive to many, as the monthly repayments will start low as a result of low house prices and will be comparatively cheap as a result of the rock-bottom base rates.

Richard Winder, spokesperson for the unbiased.co.uk 'find a mortgage adviser' service, said: "Tracker and standard variable rate mortgage borrowers have watched interest rates plunge to record lows in recent months, presenting an ideal opportunity to pay down more quickly the amount of the outstanding mortgage."

Buying a property online could allow for further savings by avoiding expensive estate agent fees, but Mr Winder added that overpaying could also shave years off of a mortgage repayment term.



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