Only one in five tracker rate mortgage borrowers are overpaying on their mortgage, with the rest passing up the opportunity to pay off their outstanding loans more quickly, it has been revealed.
With base rate earlier this year falling to an all time low, the monthly repayments on tracker rate mortgages have dropped too.
However, according to Unbiased.co.uk, just 20% of such borrowers have kept their repayments at the same level as before rates started to fall, effectively helping them reduce their mortgage repayment term, or providing the scope for lower repayments in the future.
Of those using their repayment savings elsewhere, almost a quarter claimed to be paying off other debts, while one in five said their savings were receiving a welcome boost. A further seven per cent said the balance was building up in their current account.
However, one in five admitted they were spending the windfall on day to day living or treats. Meanwhile, of greater concern, 12% said they had decided not to overpay for fear of being charged for doing so.
"While those deciding to pay off other loans or supplementing their savings might have a valid reason for not overpaying on their mortgage, the others really are missing out on a great opportunity," said Michelle Slade, spokesperson at Moneyfacts.co.uk.
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