Source: National World —
The Bank of England raised interest rates once again on Thursday (2 February).
Its base rate now sits at a fresh 14 year high of 4% – 0.5 percentage points higher than the level it was set at in December 2022. Designed to bring down inflation, the economic mechanism makes borrowing money more expensive.
Interest rates have rocketed in recent months, particularly since Liz Truss’s mini budget crashed the value of the pound and threatened to make inflation much worse. It means mortgage payers have faced a big cost of living squeeze in the form of major hikes to their monthly repayment costs, while prospective buyers have been put off or priced out of entering the housing market – something that has led to a fall in property prices.
If you’re one of an estimated 1.4 million people coming to the end of their fixed rate deal in 2023, you may be wondering how you will secure a new deal without breaking the bank. One method you could use is overpaying your mortgage – an option that has become increasingly popular since interest rates have soared.
But how does this work – and what considerations do you need to make before overpaying?
What is a mortgage overpayment?
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