Borrowers 'making overpayments' ? commercial mortgages

23 January 2009

Many borrowers have been making overpayments on their mortgages since the Bank of England started making base rate cuts, it has been revealed.

Cheltenham & Gloucester and Lloyds TSB have noted that a large amount of customers have been taking advantage of lower rates to pay off bigger amounts of their loans.

Those with commercial mortgages may wish to consider the strategy as a way of reducing debt.

Lloyds TSB stated that since the Bank of England's monetary policy committee decided to slash interest rates by 1.5 per cent in November, it has received approximately 27,000 enquiries about setting up an overpayments system.

"A year ago, a number of homeowners were extending their borrowing with further advances. We're now seeing a definite switch to paying down your mortgage debt," C&G's marketing director Stephen Noakes commented.

Customers of the two lenders will this week be receiving letters from the firms outlining how they will benefit from January's cut.
Elsewhere, Alliance & Leicester has unveiled discounts on several fixed-rate mortgages.