Knock years off by overpaying, uSwitch.com claims

Self builders who have taken out a tracker mortgage could shave years off the length of their loan by overpaying, it has been suggested.

Over 600,000 tracker customers have already used the recent rate cuts to overpay their mortgage by up to £260 a month, new research from uSwitch.com shows.

Anyone who has bought a plot of land and completed a self build could reduce their mortgage term by nine years and cut the interest they pay on the loan by £26,122, the company claims.

However, anyone contemplating a self build could also capitalise on the potential savings with a tracker mortgage as analysts are predicting further rate cuts in 2009.

Mark Dampier, head of research at Hargreaves Lansdown, has said that that zero per cent interest rates are "not impossible" - so self builder who that take out a tracker mortgage could secure similar benefits in 2009.

Louise Bond, personal finance manager at uSwitch.com, says people should consider overpaying to "reap the longer term rewards" rather than using the extra cash for shopping and leisure pursuits.