Recently released figures from the Co-operative Bank Mortgages have shown that over the past twelve months the number of customers making overpayments on their mortgages has increased by 50 per cent.

The mortgage lender also commissioned research that reveals why people are making these overpayments.

Four fifths of customers making overpayments at the moment are doing so due to the low interest rates currently available on savings.  More than one third are making their additional payments because their interest rate has fallen so much and seven per cent are paying the extra in order to increase the level of equity they hold in their home so that they can acquire a better mortgage deal.

The findings show that people understand more than before the benefits they can have from making mortgage overpayments.

Terry Jordan, head of mortgages at The Co-operative Bank, said:

“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.”

As customers become more ‘mortgage-savvy’, this can make CeMAP training easier for those who wish to become mortgage advisors.

The research also revealed why some people are choosing not to make overpayments on their mortgages.  Excluding those who were not making overpayments due to a lack of income, 29 per cent of the remainder who are not overpaying said they preferred to save their money and 24 per cent are spending their excess income on clothes or holidays.

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