Mortgage holders advised on repayment restrictions
(03 April 2007)

Those looking to make an early repayment off their mortgage should check first with their lender to ensure there are no restrictions, a commercial bank has advised.

Halifax has warned that there may be early repayment charges as these can apply to overpayments as well as closing the mortgage.

Paul Fincham, spokesperson for Halifax, said: "The overall picture is that if you are looking to make a payment off your mortgage then the first thing to do is to check with your lender and see if there are any restrictions."

He added that those whose mortgages are calculated on a daily basis can make "significant savings" by overpaying on their mortgage and that most lenders offer the ability on a fixed-rate mortgage to overpay up to ten per cent a year.

A small amount of extra repayment over the years will make "a big difference" by reducing initial capital and paying off the interest.

New figures released from the Bank of England have shown that as Britons' house prices rise, they are borrowing more against the value of their property.