New research by The Co-operative Bank Mortgages has revealed that almost two thirds of mortgage holders are aiming to be mortgage-free by the time they reach 50 years of age. 

This is a great goal, but one that is tough to make a reality. To do it you need a mortgage that encourages overpayment and actually gets cheaper the more you invest into it – you need an offset mortgage.

To be mortgage-free would be a wonderful thing – the bank found that over half of people would take more holidays, just under a third of people would turn their attention to saving more for retirement and a quarter of people would look to change their working lives by either finishing work or moving to part time hours.

And people are doing it already. Many have been making mortgage overpayments to reduce the term of the mortgage over the last year. Other people are looking to take advantage of the low interest rate environment, and some are looking to have more disposable income as a result of reductions in their mortgage rate. Ask your mortgage adviser about how well their offset mortgage clients are doing right now for an idea of the benefits overpayment can make to your life.

James Hillon, head of mortgages at The Co-operative Bank says: “The research clearly shows that many mortgage holders are looking to take advantage of the low interest rate environment by making overpayments.”

With an offset mortgage, because you can make overpayments and because you can reduce your rate by doing so, it pays to be in a low rate environment and it pays to overpay. It’s exponential as well, because the more you save the cheaper your mortgage rate and the more you have in your pocket at the end of the month, so you have the means to save even more the next month, and the next.

Talk to an offset mortgage adviser about a loan that will help you become mortgage-free. It might seem like a long way off when you are trying to manage a six-figure debt, but with hard work and good advice you can get rid of that responsibility and begin to spend your money on what you want.

SOURCE: Co-Operative Bank, 15/02/10

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