Mortgage holders are being encouraged to use their Christmas bonuses to make mortgage savings.
It is anticipated that a quarter of city employees will get more than double the bonuses they received last year. Charcolonline is urging recipients of such bonuses to use it to improve their financial situation.
The majority of mortgage holders will be able to overpay their mortgage without incurring any early repayment charges (ERCs), says the mortgage adviser's Ray Boulger.
Mr Boulger points out that many mortgage holders are however unaware of this.
He explains: "The most common amount which can be overpaid, without incurring ERCs, is ten per cent per annum, but some allow five per cent or unlimited overpayments - all of which allow a large chunk of the mortgage to be overpaid."
Mortgage holders should remain aware of the conditions of overpayment, he warns, adding that if mortgage terms are breached, a "large penalty" can be slapped on mortgage holders.
He says mortgage borrowers should always check with their mortgage lender before making any additional payments.
"In addition to allowing some ERC-free overpayments, some mortgages are fully flexible and allow overpayments to be re-borrowed," he says.
"Such a facility will allow large bonuses to be parked in the mortgage, thus saving interest, until needed for any large expenditure during the following year."
The Charcolonline website offers a number of mortgage calculator tools to help mortgage borrowers figure out how they can benefit from making overpayments on their mortgage.
Christmas bonus could mean mortgage savings
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Christmas bonus could mean mortgage savings
Wed, 14 Dec 2005
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