Majority of young homeowners paying off mortgage faster than planned due to overpayments

Almost half (46 per cent) of homeowners overpaid on their mortgage, with 18-24 years olds leading the pack with as many as seven in 10 (69 per cent) paying off more of their loan than previously arranged.

Which? Mortgage Advisers found that of all those surveyed, people in London (60 per cent) and the West Midlands (52 per cent) were the most likely to be making overpayments on their mortgages, while Scotland had the lowest level of overpayments at 38 per cent.

Paying down a mortgage early is so popular with some homeowners that a quarter (25 per cent) are paying extra towards their mortgage on a monthly basis, with an average overpayment from June 2017 to June 2018 of 14.3 per cent.

In September, Which? revealed that numerous banks were failing to pass base rate rises on to customers with savings accounts. Poor interest rates from savings accounts could be one factor driving the high levels of mortgage overpayments.

David Blake, principal mortgage adviser, Which? Mortgage Advisers, said: “While it might be surprising to hear that so many people have paid off extra chunks of their mortgage recently, the benefits can be massive, cutting months off the total length of your loan – and, in turn, saving you hundreds or even thousands in interest.

“If you haven’t done so recently, you may want to look at your remortgaging options to ensure you’re paying the best possible rate and have the flexibility to overpay when possible.”