`Many consumers` overpaying on mortgages

A significant number of homeowners are choosing to take advantage of recent falls in their mortgage rates by making overpayments, a bank has said.

Lloyds TSB reports that it has received over 27,000 requests from customers to set up an overpayment since the Bank of England`s decision to cut the base rate of interest by 1.5 per cent in November.

Since then, the Bank has lowered the base rate by a further 150 basis points, leaving it at 1.5 per cent.

According to Lloyds, it received 7,000 overpayment requests in November, a further 12,500 last month and 7,900 during the first two weeks of January.

Stephen Noakes, marketing director at Cheltenham & Gloucester - which is part of the Lloyds TSB Group - said: "Homeowners with a tracker mortgage are hundreds of pounds a month better off.

"For those who can spare the extra money, making overpayments is a smart move. Not only can it trim years off your mortgage term, but with house prices falling, overpayments will help to protect the equity in your home."