1
Feb
Paying off a debt is better than saving
People with mortgages would do better to overpay on their mortgage
if they have disposable income, as opposed to paying their money
into a savings account, according to one expert.
Paula John, editor-in-chief of Your Mortgage, said that there is
far more benefit to paying off a mortgage earlier, as opposed to
putting money into the back, because it is more "cost
effective."
"Fortunately, over the last couple of years, more people have
overpaid than before. People who can afford it and have got spare
cash, have been taking advantage of overpayments because interest
rates are very low," she added.
Last month, the Halifax said that people are currently paying less
per month on their mortgages than they have been doing since 1997,
and it also reported this week that the average amount paid back
per month had now dropped to £600.
This figure represents a five per cent drop in buying costs over
the past year.