The third largest mortgage lender in the UK said its mortgage clients overpaid more than £47.5m each week between 1 January 2022 to 13 February 2022. That was 50 percent more than during the same timeframe a year ago.
Paying extra toward a mortgage can reduce the amount of interest a loan accrues over its lifetime. If a customer taking a £200,000 mortgage at current rates over a 25-year term paid £10 extra each month, Santander UK said, that borrower could save £877 in interest and pay off the loan four months earlier.
Providing another example, the lender said a regular £100 monthly overpayment could save £7,642 in interest and wind up the loan three years sooner.
Santander said it allowed clients to make regular mortgage overpayments as small as £10 per month or pay lump sums of up to 10 per cent of the outstanding capital balance.
Helen Harrison (pictured), head of sales, homes at Santander UK, said: “We know many people have saved money during the pandemic with reduced spend on holidays, commuting and going out and using this extra cash to make mortgage overpayments can be a great way to reduce the future cost of a mortgage.
“As we look at the prospect of more increases to interest rates and further rises in the cost of living, it’s no surprise that more people are looking at where they can put their money now, to keep the future costs of owning their home lower.”
