Last week s cut will affect next month s bills. With base-rate cuts, these new deals mean that some borrowers have seen their mortgage rate fall by more than 1.5 percentage points since the start of the year. Financial Mail asked Barry and Adrian Shandley of independent adviser Balmoral Associates of Southport, Merseyside, for their recommendations. Reduce expensive debts An extra 50 or 60 a month can help to eliminate painful plastic card debts. An easy option is to increase cash savings.
Savers can find even higher rates on the internet.
On older-style loans, where interest is recalculated annually, borrowers will not be given immediate credit for overpayment. But many lenders have switched to daily interest calculations, which means that overpayments immediately start reducing the debt faster. Few families have sufficient insurance against the financial hardships caused by death or a serious illness. Investing as little as 20 a month in life or critical-illness insurance can be a prudent use of a mortgage windfall. A couple both aged 39 paying 20 a month would have joint cover of 27,760 for 15 years, also through Scottish Equitable.