Homeowners could save up to £6,000 in interest by overpaying on their mortgage according to new research by comparethemarket.com.
The research revealed that UK homeowners on a fixed rate repayment mortgage could save £5,895 and reduce their term by three years by overpaying an extra £100 a month.
For first-time buyers on a fixed rate there are reportedly higher savings, as through regular overpayments of £100 every month FTBs are able to reduce their mortgage term by almost three years and save £6,129 in interest.
The research also revealed that a majority of mortgage holders (56%) hesitate to put aside additional money towards their debt every year.
Over half (55%) say they cannot afford to make the extra payments, a third say they have too many other outgoings, and 54% agree that these charges discourage them from making overpayments.
Mark Gordon, director of mortgages at comparethemarket.com, said: “Even though committing more of your pay cheque towards your mortgage can seem financially daunting, even modest but regular overpayments can save you thousands in the long run.
“Households on standard variable rates are likely to be paying higher interest rates and have more expensive monthly mortgage commitments.
“If you are on an SVR, instead of overpaying on your mortgage it may be wise to switch to a fixed rate product which is always cheaper.
“You can then use that extra money to make overpayments and reduce your term even further to avoid paying unnecessary sums in interest.”