Paying off the mortgage is the goal of every homeowner and after the past few years of interest rate hell, that goal has started to seem more and more distant for many. But there is one "rule of thumb" popularised by finance guru Martin Lewis that has led to some knocking thousands of pounds off their mortgage.
"Let's oversimplify this, if you have £10K in savings earning 4 per cent interest, you are gaining £400 a year. Or, if you were paying tax on your savings because you have gone over the personal savings allowance, you would be earning £320 a year after tax. A long-time listener wrote to Martin Lewis to thank him for his advice, while sharing his mortgage overpayment success story. They said: "We moved jobs seven years ago and had to buy a small property to use for work purposes. We managed to get a 100 per cent mortgage, though it was expensive.
Martin Lewis said: "Many lenders will let you overpay 10 per cent of your mortgage balance penalty free, often above that there are penalties which wipes out any gains, so do check."