Borrowers adviced to overpay now

During the recent years, running a home for molst home owners has become substantially cheaper for households. Even though quite a lot of expenses such as fuel and food have seen a jump over the period, in general the cost of running a home has decreased by about 14% since 2008.

Financial experts say that the fall in costs can be explained by the current low interest rates charged on an average home owner mortgage. Since March 2009, when the base interest rate was reduced, the average family pays 28% less each month on their loan than in 2008, when their loan constituted around 43% of their income.

Nevertheless, one property expert claims that in all probability, such cheap loans will come to an end, and the costs of running a home would be much higher again.

T. Lambert of Ducalian has stated that a large number of home owners who have obtained inexpensive loan deals over a short term of up to three years, would have their loan repayments increased as soon as the initial deal comes to an end.

Taking into account the existing lending restrictions and the FSA changes to regulation of home owner loans looming on the horizon, many borrowers with a current loan may now be unable to take advantage of the remortgage option when their initial loan deal expires.

All this information means that those individuals who are happily sitting on cheap loan rates right now are strongly recommended not to miss the chance to overpay as much as they can on their loan while the rates remain the same.

 


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