AA Mortgages has launched a range of new benefits to its customers that allows them to potentially take months and even years off their mortgage term by making the smallest of payments.
The minimum overpayment has been slashed from £500 to just £1. A customer with a loan value of £190,000 on a 30-year term could take 13 months off their mortgage term and also save themselves £6,543 in interest, simply by using the average £17.26 loose change behind the sofa to overpay the mortgage.
In addition, all new AA Mortgage customers will receive an annual loyalty bonus, with a payment of 0.1% of the mortgage balance paid on the anniversary of the mortgage, every year. That’s £190 per year, on a mortgage of £190,000. This can be used to pay for a family treat or to make overpayment to the mortgage.
David Searle, the AA’s director of financial services, said: “In a mortgage market where the focus is too often cast on mind boggling numbers on record house price sales, for most homeowners it’s about the pounds and pence. For many life is getting more expensive which is why so many are looking to make small economies on their monthly commitments, savings that add up.
“Our new mortgage features for new customers supports this. Most homes have a jam jar with loose change and most family sofas give sanctuary to a surprising number of pound coins. Giving people the opportunity to put this money against their mortgage can take months or even years off the term. Paying in small regular sums can make a big difference in saved mortgage interest and repayment term.
“At the AA we try to get the big things right, such as good rates and good services, but the little things matter too. Most people want to clear their mortgage and we’ve just made it a little easier.”