A mother of two is making significant savings by using a free app to accelerate paying off her mortgage. Eleanor and her husband recently upgraded to a larger home but opted to make extra payments to reduce their mortgage term.
Eleanor started utilizing Sprive in 2022 amid rising interest rates. The app links to your bank account to track spending and assist in setting aside affordable overpayments for the mortgage.
By setting payment limits and purchasing gift cards with selected retailers through Sprive, users can earn cashback that can be directed towards mortgage repayments. Eleanor particularly benefits from this feature by obtaining gift cards for major grocery shopping at Tesco and M&S.
Through consistent efforts like these, Eleanor is on track to shorten her mortgage term by three years and save £20,000 in interest. She plans to continue overpaying even more once she is no longer burdened by nursery fees.
Sprive, which collaborates with various lenders like HSBC, Lloyds, Barclays, and others, is a regulated app approved by the Financial Conduct Authority. Overpaying on mortgages can lead to substantial long-term savings, as exemplified by a hypothetical scenario where overpaying £100 monthly on a £250,000 mortgage at 5% interest could save over £25,000 in interest and reduce the term by almost three years.
However, it is crucial to address other high-cost debts first and maintain an emergency fund before prioritizing mortgage overpayments. Ensuring that overpayments reduce the actual debt owed is essential. Financial experts recommend creating a realistic budget plan to anticipate future expenses and adjust overpayments accordingly to avoid surprises.