Research by unbiased.co.uk showed that 63% of borrowers have not overpaid on their mortgage payments, up from 53% of borrowers in May 2009. Only 11% said they were making occasional overpayments on top of their current monthly payments.
Just 13% have deliberately chosen to maintain their mortgage repayments at the same levels they were at before the Base Rate fell to 0.5% in March 2009. This compares to 20% of those who were overpaying on their mortgage in May of last year.
Of those not choosing to overpay, 28% are using the money they save on their mortgage to pay off other debts, while 24% are merely spending the cash on day-to-day expenses.
In addition, despite interest rates on savings accounts remaining at an all-time low, 13% have chosen to put their additional money into savings, while 4% have treated themselves to something like a holiday.
Karen Barrett, chief executive of unbiased.co.uk, said: “With the Base Rate remaining at an all-time low of 0.5% since March last year, many tracker and standard variable rate mortgage borrowers have enjoyed prolonged lower monthly payments. This has presented many with the ideal opportunity to pay off their outstanding mortgage more quickly, resulting in years being taken off their overall mortgage repayment term or enjoy a greater level of repayment comfort down the line.
“It is worrying to see that instead of taking advantage of the historic low Base Rate, our research shows there is an increased trend of people failing to overpay on their monthly mortgage payments.
“We are encouraged by the increasing numbers who are using their repayment savings to erode their more costly credit card and personal loan debts. However, those who are instead putting the extra into a savings account are missing out, as interest rates on savings also remain at a record low.”
