Thursday 2nd of April 2009
Borrowers are taking advantage of lower interest rates to reduce their debt, it has been observed.
According to moneysupermarket.com, Bank of England data has demonstrated a "more astute" approach to financial issues, as rate cuts are being used to overpay home loans and other forms of finance.
Head of mortgages at the price comparison site Louise Cuming explained that doing so could help consumers with their debt management efforts.
"Firstly, you reduce the amount of interest you pay over the life of the mortgage. Secondly, you increase the amount of equity in your home," she said.
Homeowners who have not benefited from the reductions or who are still struggling to repay what they owe may wish to seek IVA help and consider non-borrowing options.
Recent Land Registry figures indicated that a growing number of people could be facing the prospect of negative equity, with the average house price having fallen by 16 per cent over the last 12 months.
