If you have a flexible loan there isn’t a better time to take advantage of its options than now – but not enough people are maximising their financial potential.

Research by Unbiased.co.uk suggests that over half of tracker mortgage holders are still not taking advantage of historic low rates to overpay on their home loan. This is particularly worrying if any of these borrowers have a flexible mortgage that encourages overpayments – some mortgages will limit how much you can overpay, but flexible loans encourage flexible payments.

Of those not overpaying on their mortgages, one in four are using the extra money to pay off other debts, but one in five are frittering cost savings away, and 7% are even letting their current account balances build up.

If you have a flexible loan, overpaying means you reduce how much you pay each month, and it also means the term of your loan is reduced. Simply, it’s the best thing you can do for your mortgage.

David Elms, chief executive of Unbiased.co.uk comments: “Interest rates have plunged to record lows during this year, presenting an ideal opportunity to pay off their outstanding mortgage more quickly. Such action would enable many thousands of borrowers to take years off their mortgage repayment term, or enjoy a greater level of repayment comfort down the line, should the economy take longer to recover.

“But most tracker borrowers are not taking this action. If you are confused about how to best manage your mortgage and take advantage of low interest rates, professional and personal mortgage advice can make a clear difference. Only a whole of market mortgage adviser will be able to advise borrowers on the best deal for their circumstances.”

SOURCE: Unbiased.co.uk, 22/09/09

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