Now is the time to overpay

Ray Boulger, senior technical manager at Charcol, said: "Historically low interest rates and contining high employment levels mean that house prices are rising more quickly than most forecasters, including ourselves, expected at the end of last year. We now expect national house price inflation in 2002 to be in the 7-10 per cent range, but with marked regional variations.

"It is generally accepted that we will not see any significant rise in rates before the third quarter of this year. Therefore borrowers with mortgages that allow penalty free overpayments should seriously consider making use of this extended window of opportunity to overpay on their loan. With an estimated three-quarters of all new mortgages currently issued having flexible terms there will be many borrowers who are currently not actually aware that they have this facility. So those that are unsure should check the terms of their mortgage. This tactic will lighten the burden of interest repayments when rates do rise, while flexible mortgages will also have a buffer should rates rise further than expected."