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50% increase in mortgage customer overpayments

The results also highlight that more than a third of people are paying off extra on their mortgages because their rate has fallen due to falls in base rate (37%). And almost one in 10 people making overpayments are hoping to secure a better mortgage deal, by increasing the amount of equity in their homes (7%).

Conversely, the findings also reveal why some people are not currently overpaying on their mortgages. Apart from lack of income, almost a third of those not overpaying would prefer to put their money into savings (29%) and a quarter of people are spending any excess money they have on holidays and clothing (24%).

Furthermore, the research also shows that a fifth of people (21%) believe they will get a better return on their money elsewhere, the same number of people do not trust the housing market (21%) and almost a fifth are using any spare income to save up for a special occasion (19%).

Terry Jordan, Head of Mortgages at The Co-operative Bank, said: "Our internal data has shown a 50% increase in our mortgage customers making overpayments. It would appear that with interest rates now at an historic low, customers are recognising more than ever the benefits of making overpayments.

"Providing their mortgage allows the flexibility to overpay, at the current time it can make real financial sense for customers to make even small monthly overpayments, as these can really add up to a large difference over the lifetime of the mortgage."

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