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Tracker mortgage consumers `to save 9bn over next year`

28 December2008

People with tracker mortgages will be better off by a combined total of 9 billion by next Christmas as a result of the recent falls in interest rates, new figures suggest.

Produced by uSwitch.com, the statistics indicate that 616,350 consumers have used the extra money they have as a result of falls in their home loan repayments to overpay by up to 260 a month.

This could knock around nine years off the term of a mortgage and could reduce the interest accrued on it by around 26,122, the price comparison site suggested.

However, 31 per cent of consumers on tracker products have been forced to use the additional cash available to them to pay household bills, while six per cent have spent the money on treating themselves.

Personal finance manager at uSwitch.com Louise Bond said: "For some home owners, the onset of the recession has meant this extra cash is the lifeline they need to pay off any outstanding bills or debts they have accumulated over the last year."

Earlier this month, the Bank of England reduced the base rate of interest to 100 basis points by two per cent.

Tags: mortgage, tracker mortgage

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