Source: Financial Times —
Mortgage borrowers scrambled to pay down their housing debt after interest rates on home loans soared, with lump-sum repayments and redemptions jumping to £2.4bn in October last year from £1.7bn in the same month in 2021.
The figures from industry body UK Finance illustrate the fallout from the government’s “mini” Budget of September 2022, which sparked turmoil on bond markets and caused interest rates on fixed-rate mortgage deals to skyrocket.
Researchers at estate agent Hamptons International estimated the interest savings that these borrowers would have made from paying their debt early. They calculated that overpayments made in October alone would save £1.3bn in interest over the following 12 months, compared with £187mn saved the previous year.
Savings on overpayments were less marked in the latest November figures, with £1.1bn saved over 12 months compared with £247mn in November 2021. But Hamptons said they expected December to show a continuing trend.
