Mortgage borrowers ‘trying to clear debt’

Thousands of borrowers are working towards becoming debt free by making overpayments on their mortgages, it has been claimed.

Lloyds TSB and Cheltenham & Gloucester (C&G) have revealed that many of their customers are taking advantage of the current low level of interest rates to pay off higher amounts on their homeowner loans.

Since the Bank of England’s decision to slash the base rate by 1.5 per cent in November, Lloyds TSB has received more than 27,000 requests to set up mortgage overpayments.

And this week tracker and variable mortgage borrowers will receive letters from the two lenders telling them that they will be benefiting from the latest base rate cut, made earlier this month.

Stephen Noakes, C&G’s marketing director, commented: “A year ago, a number of homeowners were extending their borrowing with further advances. We’re now seeing a definite switch to paying down your mortgage debt.”

Meanwhile, Alliance & Leicester has reduced rates on a range of fixed-rate mortgages.

By Jamie Price