Lloyds Urges Consumers to Repay Home Loans Early

Mon, 15 Mar 2010

Borrowers have been urged to repay their mortgages early if possible by Lloyds Banking Group. The current low interest rates have provided the perfect conditions for an early mortgage repayment, with the Bank of England estimating that UK households have saved around £20 billion in mortgage repayments as a result of lower interest rates. It is estimated that one in four borrowers has used the excess cash to pay off more of their mortgage.

Mindful of the potential loss of income, many banks and lenders impose a cap on the amount consumers may repay in one year. Lloyds has a set limit of 10 per cent overpayment per year. Halifax, the main mortgage lending division of Lloyds, would not confirm how many of its existing customers were using this facility, but Halifax did say that it was working with its customers to help them repay their mortgages.

Traditionally, consumers may have opted to deposit extra money into their savings accounts, though with such miserly interest rate offerings savings accounts as well as on personal loans, it is more fruitful for consumers to repay debts . Commercial director of mortgages at Lloyds Banking Group, Stephen Noakes, revealed estimates that the average mortgage repayment has fallen by £188 per month.
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