Monday 14th of September 2009
Britons who are on tracker mortgages may have benefitted from the 0.5 per cent interest rate, but one financial expert suggests households increase their repayments.
Catherine Hearnden, director of MyMortgageDirect, says while the interest rate remains low, people should use it as an opportunity to make mortgage overpayments.
However, households with high levels on unsecured debt may not have the cash to do this, but they could find that a debt management plan helps them organise their finances to allow for bigger mortgage repayments.
"The ones who have been on trackers are feeling a huge amount of benefit. Some people are paying silly money - virtually nothing for their mortgage," Ms Hearnden states.
But rather than using any spare cash to pay more, people may have found it swallowed up by increasing interest rates on loans and credit cards, which have not remained low.
A debt management plan could reduce the interest on such debt, allowing monthly commitments to be met more easily and, in turn, leaving more income to be put towards a mortgage.
Halifax also notes that the average UK family spends 29 per cent of their disposable income on monthly mortgage repayments.
By Hayley Jones
