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'Offset mortgages can save £22k'

25 January 2006
Homebuyers who overpay by just £3 per day on their mortgage could pay it off three and a half years early, according to new research.

Abbey calculates that borrowers with an offset mortgage who slightly overpay each day on their repayments could save themselves £22,000 in interest.

The lender's savings offset mortgage, the Flexible Plus, is a lifetime tracker product which offers customers flexible features such as overpayments, underpayments and payment holidays.

Abbey calculates that the average overpayment made by its customers is almost £500 a month, peaking at £560 in November and dropping significantly to £215 in December.

If this amount was spread out over a 12-month period, Abbey works out that it would save £11,300 in interest and allow customers to be able to pay off the mortgage one year and nine months early.

"Our offset customers benefit in many ways," said Lal Tawney, head of mortgage marketing at Abbey.

"Not only will they pay a competitive rate of interest for the life of the mortgage without having to switch to a new deal, but any overpayments will reduce the interest charged as well as cutting the mortgage term."

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