Reduce Your Debt While You Still Can

Over paying on your mortgage repayments may be costly experience at this time of the year, but could be as worthwhile investment if you have got the cash to spare and access to low interest rates.

Speaking on recent interest rate cuts, property advisors are recommending to homeowners to take advantage of this low interest rate opportunity and pay off as much of their mortgage as they can - especially as it has been predicted that interest rates will rise again as the economy grows.


Currently no one can be completely sure what will happen to the economy during 2010…

Whilst some property experts believe that the base rate will not rise again until 2014, keeping interest rate rises below 2%; others believe 2010 will witness static property prices which will prompt the government during the General Election to raise taxes and interest rates exponentially.

Either way now is the perfect time to harness low interest rate deals and better your financial situation.

Not only will overpaying on your mortgage help to decrease your loan term, but it can also help to lower the total amount you repay in interest, thus helping to reduce your overall debt.

More than a million people aged over 50 are believed to be relying on increasing property values to help fund their retirement. Yet since the onset of the recession during autumn 2007 an estimated £27,250 is believed to have been wiped off the price of UK property values.

Even following the last 7 months which has witnessed property price increases of £15,000, this overall property loss has still severely dented pre-retirees plans to use equity release to boost their retirement.

According to popular insurance company Liverpool Victoria, more than 12% of over 50s believed so much in the capital growth of their properties that they have chosen to save less independently.

And as a consequence, many now face a reduced standard of living when they hit retirement..

Yet despite these property price falls, confidence still remains in the long term value of their properties.

Through the use of equity release - where money is taken from the value of their properties – many over 50’s plan to fund their retirement by taking money out of their properties.

However, consumer group Which? feels this could be a big mistake and should only be used as a last resort.

Expensive, inflexible, and more often than not designed to leave people with little equity to play with; property experts recommend downsizing to a smaller, cheaper property instead. Not only is downsizing easier but pre-retirees can instantly benefit from these profits.

Original Article

More About the Author

Fraser Stirling, Property Mentor Delegate

No matter what the media wants you to believe, property is still the only investment route where you can benefit from an asset that will NEVER go into zero value. Even when I was university I admired properties ability to withstand the economic elements and stay strong, even when other investment forms faltered or failed. X years on, I am now the proud owner of multiple property investments - one of which earns a passive income of £4,680 and my property portfolio is still expanding. Read more