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Lloyds doubles mortgage overpayment allowance

By Matthew Plant - Financial specialist

15 March2010

Lloyds Banking Group is to launch a new scheme allowing its variable-rate mortgage customers to `overpay` by up to 20% without incurring any financial penalty.

This is double its previous overpayment limit of 10%, and `underscores [its] commitment to help its customers gain maximum advantage from the current low rate environment`, according to the bank.

A mortgage expert at Think Money said that making overpayments can make very good financial sense for homeowners who can afford to do so.

"The maths of making overpayments is quite simple: the homeowner will clear their mortgage more quickly, and will pay interest for a shorter time as a result.

"However, making overpayments does put an additional burden on the homeowner`s finances at the time - so anyone planning to do so should make sure they`re not compromising any of their other commitments."

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Tags: mortgage, variable rate, Lloyds, variable rate mortgage

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