The findings from Santander Mortgages reveal that 19% of those with a mortgage currently over pay every month. These 2.5 million people each overpay an average of £181 every month, meaning they are collectively paying an additional £455 million on top of their standard mortgage repayments on a monthly basis.
Another 6% tend to make a one off overpayment on their mortgage once a year and a further 9% don’t regularly over pay but have done so once in the past 12 months. Those who have made a one off over payment in the past year, that is nearly two million people, over paid an average of £1,919.
The research also shows that in total 34% of those with a mortgage make some form of overpayment, whether monthly or via one off payments, and many have started over paying in recent months and years, to take advantage of low interest rates. Some 13% of those who over pay every month started doing so in the past six months, 24% within the last year and 54% within the last two years.
Despite the prevalence of over payments 23% have no idea if their mortgage provider allows overpayments at all and a further 14% say their provider allows over payments but aren’t sure if they charge for them. Another 8% say their mortgage provider definitely charges customers for making over payments.
Santander, which offers its customers the freedom of over paying on their mortgage whenever they want to, is suggesting that people should consider doing so to take advantage of low interest rates. Its research reveals that of those people who don’t tend to make mortgage over payments some 36% say they could afford to by an average of 18% extra.
‘If you over pay on your mortgage you will pay less interest over the full term, so it’s a good thing to do if you can afford to. Nearly half of those people who have never overpaid on their mortgage still put money into savings each month, and given the average interest rate on these people’s savings accounts is just 1.6%, in the long term they may be better off using this money to make mortgage overpayments instead,’ said Phil Cliff, director of Santander Mortgages.
In addition to the freedom to overpay, including unlimited overpayments on its Tracker and Flexible Offset mortgage range, Santander’s mortgage range also offers a wide variety of features that give customers the freedom to choose what is most important to them, be it the ability to switch their mortgage, avoid booking fees or get help with upfront costs.
The majority of Santander’s fixed mortgage products come with a free valuation and £250 cashback for those buying a home and a free valuation and £250 cashback or free legals for those re-mortgaging.
