Finance Choices

ICICI Savings Account

Barbara Gordon — Thu, 03 Aug 2006 13:29:00 +0000

ICICI UK Bank is the UK subsidiary of India's second-largest bank. It has been open for business in the UK since November 2003 and offers a full range of banking products.

The one that caught the attention of Bruce and I is the online HiSave savings account. It launched paying a whopping 5.4%, which was reduced to 5.15% in November 2005.

Sonjoy Chatterjee, managing director and chief executive officer of ICICI UK Bank told me the main reason why it is not compliant is because customers are not able to change their card Pin to a four-digit number of their own choosing. He explained that the bank's operating system was being upgraded to enable customers to do this and he hoped it would be ready in the first half of this year.

But there are several other aspects of the bank that I am still not entirely comfortable with. For instance, Mr Chatterjee told us that the average length of time it takes for a transfer to arrive from the saver's current account to their HiSave account is eight working days.

This is compared to three days with most online accounts, meaning that savers lose around a week of interest every time they do a transfer. We could find no mention of the time period in the terms and conditions for the account although Mr Chatterjee assured us that customers were aware of this.

He told us they had addressed several aspects of the bank's customer service that we raised with him several months ago. Readers complained their emails were going unanswered, phones in the customer service department were ringing out and it was impossible to get problems sorted out.

He said it was now standard for account holders to have a reply to emails within one day. He also said extra customer service staff had been employed, although he would not be drawn on how many. He also would not say how many British savers had opened a HiSave account or whether the bank planned to further the reduce the rate. It guarantees to stay 0.25% above the base rate until December 2007.

Importantly, ICICI is covered by the FSA compensation scheme which means that the bulk of your savings up to �32,000 are protected.

Susan Hannums, savings manager at AWD Chase de Vere told me that they were watching closely monitoring the bank's activities, but were not recommending it.

'We haven't used them yet and there's nothing particularly wrong with them but we're just sitting back and waiting for the dust to settle a bit,' she said.

'I understand their customer service is appalling and it was taking people weeks just to get their account set up. But they are covered by the FSA compensation scheme, which is the main thing.'

Finance Choices verdict: The bottom line is that your money is protected by the FSA and the rate is good. But we're reluctant to recommend an institution that does not meet minimum customer service standards and that routinely takes eight working days for funds to be transferred. We've heard so many mixed stories about ICICI that we urge caution. We agree with Susan Hannums. Stick with what you know until their UK record is better established.

Find our more about the ICICI Savings Account now.

Wallets full of unused credit cards

Bruce Wayne — Mon, 21 Aug 2006 09:30:00 +0000

Millions of Britons are carrying credit cards around with them that they never use.

But while the average Briton is carrying 2.1 credit cards with them every day, one person in four has one card in their wallet that they have not used in the last year, while one person in nine has two unused cards and one person in ten has three, figures from Morgan Stanley show.

The least likely card to be left languishing at the back of wallets is a cash-back card. Just one unused card in seventeen is a cash-back credit card.

By contrast, cards handed out by major banks and balance transfer cards with their interest-free period expired make up the majority of unused cards.

"There has been much speculation about the increasing use of plastic in the UK but our report shows that British cardholders are perhaps more savvy than they have been given credit for," said Patrick Muir, marketing director for the Morgan Stanley Credit Card

"Millions of cardholders are taking advantage of loyalty schemes for their everyday spending, with these cards least likely to be lying idle in wallets."

However, there is a danger to dormant cards. While it makes sense to have a back-up card for emergencies, these are the cards that present the greatest identity fraud risk.

This is because when people do not use cards, cut them up, or leave them in a draw the account remains open. Identity fraudsters who obtain personal information about the account holder can contact the credit card provider and get the account's address changed.

After this new/replacement cards - along with bills - are sent to a different address and the fraudster can access the account for months racking up thousands of pounds of debt. They can even get the pin-reissued to the new address.

And as the account is dormant the real cardholder is not used to receiving statements, meaning they do not even notice this happening.

Halifax Isa Investor

Barbara Gordon — Tue, 13 Jun 2006 14:33:00 +0000

This stocks and shares ISA allows you to invest in the UK FTSE 100 Index Tracking Fund. The fund aims to help the value of your money grow by aiming to match as closely as possible the performance of the FTSE 100 Index, which is made up of the largest 100 UK companies.

As a stockmarket based investment the value of your investment and any income it provides can go up or down and is not guaranteed. You may get back less than you originally invested.

Why choose an ISA Investor - UK FTSE 100 Index Tracking Fund?

No initial or exit charges and a yearly management charge of 1%

Choice of investing up to �7,000 in a Maxi ISA or �4,000 in a stocks and shares Mini ISA each tax year.

Invest a lump sum of at least �500 or a regular monthly payment of at least �50

Fund invests in shares of the top 100 companies listed on the London Stock Exchange

View plan information and manage your plan online.

You should look to invest for at least 5 years and we recommend that you have other savings to meet your short term needs

Apply now

Capital One Easy Access Account

Barbara Gordon — Tue, 26 Jul 2005 09:58:00 +0000

The Capital One Easy Access Account

The Easy Access savings account from Capital One features a competitive interest rate of 4.75% AER on investments of �2,000 to �1m. (AER includes a bonus of 0.3% for the first year, reverting to 4.75% thereafter).

Your interest payments are made either monthly or annually, depending on which you prefer and are tracked to the Bank of England base rate until at least the 31st March 2007, ensuring you a competitive rate of interest on your savings.

Who can open a Capital One account?

Any private individual who is a UK resident and aged 18 years or over can open a Capital One Savings Account - you do not need to be an existing Capital One customer. These accounts are not intended for use by businesses, clubs, charities and other organisations.

Can I open a joint account?

Yes, up to 4 individuals can be linked to a single savings account. Each of the joint account holders is able to transact on the account, without requiring authorisation from all account holders.

How do I open an account?

To open an account, simply complete the account opening form and follow the steps outlined in the form. Click here to apply for an account.

Summary

4.75% AER including first year bonus of 0.3%

Invest between �2,000 and �1m

Unlimited, no-penalty access to your money with no notice period

Interest paid monthly or annually

Interest rate to track the Bank of England Base Rate until 31st March 2007

The Easy Access savings account from Capital One features a competitive interest rate of 4.75% AER on investments of �2,000 to �1m. (AER includes a bonus of 0.3% for the first year, reverting to 4.75% thereafter)

The rate is guaranteed to track the Bank of England Base Rate until at least 31st March 2007, and you can choose monthly or annual interest payments.

Unlike some high interest savings accounts, the Easy Access account has absolutely no access restrictions - you're free to access some or all of your funds at any time with no notice period or penalty.

Apply now

Birmingham Midshires Savings Account

Barbara Gordon — Wed, 08 Mar 2006 14:25:00 +0000

Who are Birmingham Midshires?

Birmingham Midshires has roots dating back to 1849 and is the result of an amalgamation of some 50 building societies including the Liverpool and Birmingham & Bridgwater Building Societies. The branch network is concentrated in the core areas of the West Midlands, North West and South West. The Wolverhampton head office also provides a range of post and telephone savings accounts and services. In April 1999 Birmingham Midshires became part of the Halifax Group (and, since Halifax and Bank of Scotland merged in 2000 are now part of the HBOS Group), retaining its own brand, branches and product range whilst being able to draw on the considerable resource and market expertise of its parent.

About the Birmingham Midshires Savings Account

The Birmingham Midshires Savings Account offers a refreshing alternative to many of the high yielding accounts on the market in that you can invest as little as �1 to get you started.

The interest rate of 4.80% Gross/AER is competitive and whilst paid annually still offers good value for money. You can also make unlimited transfers with no additional penalties, whilst transfering money effortlessly from your Internet Easy Access Account to your nominated bank account.

The account can only be accessed via the Birmingham Midshires website, although for those comfortable with the web this is often a help rather than a hindrance as it offers access to your details 24/7.

Overall the Birmingham Midshires Savings Account is a good offering and well worth investigating.

Summary

Invest as little as �1 and earn a high interest rate of 4.80% Gross/AER.

Access your account at any time.

Make unlimited transactions with no penalties.

Transfer money effortlessly from your Internet Easy Access Account to your nominated bank account.

View full and mini statements.

You'll receive a first year bonus of 0.50%

Birmingham Midshires Savings Account

Barclays Regular Saver Account

Barbara Gordon — Wed, 22 Feb 2006 09:10:00 +0000

Barclays is launching a market-leading ten per cent Regular Saver account tomorrow, as part of a re-vamp of its savings range.

The new Barclays Regular Saver account will offer customers a return of ten per cent gross/AER on savings of between �25 and �250 per month for a year after the account is opened.

Both new and existing customers can open the account, as long as they pay at least �1,000 into a Barclays current account every month - either through salary or pensions credit.

But this, added to the locked-in nature of the account, means the deal is slightly weaker than it first appears.

The maximum investment in the account is �3,000 - assuming the full �250 is paid in each month - the same as a cash mini-ISA. The difference is that money cannot be withdrawn from the Barclays' ten per cent Regular Saver account without sacrificing the ten per cent interest rate.

If people break the terms of the account (for example missing too many payments, or withdrawing money early) interest will be paid out at the same rate as Barclays' Easy Saver account - currently 2.96 per cent.

Additionally, while ISA's build up interest tax-free, the interest earned on the new Barclays account has tax charged on it - effectively reducing the amount of money earned from ten to around eight per cent.

The maximum amount people can earn from investing in the Barclays' Regular Saver, after tax, is �120 - assuming the full �3,000 is invested. By contrast, putting �3,000 into a top-rated cash mini-ISA can earn around �150.

Additionally, Barclays neither offers cashback on current account spending, nor charges a significant amount of interest on positive balances on current accounts. Nationwide, Smile, Cahoot, Lloyds TSB, and Alliance & Leicester all offer interest on positive balances of at least three per cent.

Additionally, several other providers are currently offering ten per cent returns.

People opening Alliance & Leicester Premier and Premier direct current accounts can receive both a ten per cent savings account, and five per cent interest on positive balances in their current account. Halifax offers a ten per cent savings account for children, while Bradford & Bingley also offer a ten per cent regular saver deal.

Overall, the high headline rate means that for existing Barclays customers with some spare cash to invest, the new Regular Saver account is a good deal. However, people switching accounts would earn more with Alliance & Leicester and people simply looking to put money away can get the same rate with Bradford & Bingley.

"There are millions of Barclays bank account customers paying in over �1,000 a month and such individuals that do not have the inclination to switch their current account elsewhere, should take advantage of this ten per cent rate," commented Stuart Glendinning, director of savings at price comparison website www.moneysupermarket.com.

Credit Plus Car Loan

Barbara Gordon — Thu, 18 May 2006 09:04:00 +0000

Credit Plus Car Loans

Credit Plus is a flexible concept which can provide the financing needed to purchase your next car, even if you have had previous bad credit issues for whatever reason.

Credit Plus is a free service which allows you to choose the type of vehicle you want to buy as well as offering expert advice on vehicle selection and a providing a choice of finance methods and delivery options.

With over 15 years experience in providing finance solutions to commercial organisations and private individuals, Credit Plus provides car and van finance for any make and model of vehicle up to 3.5 ton.

Credit Plus can not only offer you the most competitive assured car finance deal, you can also search our database of over 32,000 live vehicles to find your vehicle of choice:

Summary

Credit Plus UK specialist vehicle finance company providing approved and guaranteed car finance, cheap car credit loan to individuals for hire purchase, purchase car credit, purchase personal contract and purchase motor insurance. Besides offering commercial vehicles purchase and motor insurance, Credit Plus ensures cheap sports cars lease by organising finance and supplying the vehicles as well as cheap purchase of cars through self employed secured car finance and car credit loans on personal contract basis.

Credit Plus Car Loan

SupaLoans Secured Loans

Barbara Gordon — Fri, 19 May 2006 08:49:00 +0000

About SupaLoans

Supaloans.co.uk was launched in 2005 and is privately owned. They have partnered with Greenhill Finance, a leading finance broker, to introduce providers who have schemes to cater for all circumstances. Any UK resident over the age of 18 is welcome to use this service including individuals who have experienced arrears or general financial difficulties. They believe they can supply their customers with the best possible service they can get anywhere.

SupaLoans

SupaLoans provides UK customers with low rate loans to meet a variety of its clients needs. As a privately owned organisation this UK loan company can compare for you; secured bad debt loans, secured homeowners loans, secured home improvement loans, home equity loans, fast and secured loans, low cost secured loans, personal loans secured holiday loans, debt consolidation and credit repair loans - every kind of financial loan that you require at a average rate of 10.9% but which can often be as low as 7.4%. Providing honest and efficient services loans with SupaLoans are approved quickly and easily with low rates and no hidden costs - truly some of the best low rate loans on the market.

SupaLoans also provides a weekly loan newsletter where you can obtain helpful information such as personal finance news, loan APR's and credit card interest rates. This site caters to all UK residents of legal age including individuals who have experienced bad credit or financial difficulties in general which makes these services stand out above the rest. Whether a secured low rate loan for a holiday, home improvements, a holiday home, a brand new car or to clear existing debt they offer some of the best comparison secured homeowner loans with some of the best secured loan APR's on the market today.

Summary

Supaloans offer secured loans and homeowner loans from 7.9pc APR. Supaloans also cater for bad debt loans, car loans, holiday loans, and can repair your credit. If extra money is required today, users can visit their website for a quick decision. The company only offers loans to homeowners.

SupaLoans

Alliance & Leicester Personal Loan Scoop Award

Bruce Wayne — Wed, 25 May 2005 15:49:00 +0000

Alliance & Leicester personal loans have been given the seal of approval with an award from a consumer magazine.

The readers of Personal Finance & Savings magazine have voted Alliance & Leicester Best Personal Loans Provider for 2005.

The bank beat off stiff competition from several other top high street financial providers to win the top place, whilst Tesco and Halifax came second and third, and Lloyds TSB and Nat West took the eight and ninth positions.

"We are delighted to have been voted Best Personal Loan Provider by the readers of Personal Finance & Savings magazine," said Andy Bayes, head of Alliance & Leicester personal loans.

"We pride ourselves on giving our customers a great loan experience, both in terms of the customer service they receive and great value we offer."

More than 6,200 readers voted to choose the top banks over a three-month period.

Alliance & Leicester has built on its success, being highly commended in last year's awards.

About the Alliance & Leicester Personal Loan

The Alliance & Leicester personal loan is a straightforward easy to use offer. With one of the lowest APR's of only 6.4% The Alliance and Leicester personal loan gives great value for money. As with all personal loans the rate you are offered is dependant on your credit rating.

The 6.4% APR is applicable for personal loans taken out at between �5000 to �15000. Alliance % Leicester have made it very easy to apply and you will get a very quick decision on your loan application.

You can have the option of up to 5 years to pay off your personal loan and the interest rate that is offered you is fixed for the term of the loan.

An Alliance & Leicester personal loan is available for any purpose be it a holiday, car or home improvement.

Applying for an Alliance & Leicester Personal Loan is really easy too. All you need to do is fill in an online application form which takes about 15 minutes to complete. They will email you a response within minutes. Once you've been approved, Alliance & Leicester will send you the necessary paperwork for you to sign and once you return it, the money will be on its way.

Sainsbury's Life Insurance

Barbara Gordon — Mon, 08 May 2006 14:23:00 +0000

Customers who purchase a Sainsbury's Bank Life Insurance policy before March 26th 2006 will be given a five per cent discount.

This price reduction will apply for the duration of the policy purchased.

The bank claims that it offers one of the cheapest life insurance premiums on the market and was voted the most competitive term assurance provider of 2005 by Moneyfacts.

Research from the financial website suggests that, for the profile of a healthy 35-year-old woman, Sainsbury's offers the lowest monthly premium of �5, followed by Standard Life at �6, Scottish Widows at �6.55 and Abbey at �6.61.

The bank claims that the introduction of this new discount makes its life insurance premiums "even more competitive".

Its statement also stresses that the cost of Sainsbury's Bank Life Insurance is dependent upon the level of cover selected, the length for which that cover applies and individual circumstances.

Summary

If the worst was to happen, you'd want to make sure your loved ones were taken care of if you weren't around. Sainsbury's offer life cover from as little as �5 a month.

Choose either single or joint cover over a term of up to 40 years, and choose the amount of cover that meets your needs.

The policy will pay out a cash lump sum upon death, or diagnosis of a terminal illness.

Choose from 3 life cover options: to protect your family, protect your home and family, or just your home.

Sainsbury's Life Insurance

Bank of England to put interest rates on ice

Bruce Wayne — Thu, 04 May 2006 06:44:00 +0000

The Bank of England is set to freeze interest rates for another month when it announces its decision tomorrow, experts predict.

For the last eight months the Bank's interest rate setting Monetary Policy Committee (MPC) has left base rate unchanged at 4.5 per cent, and there are few signs that it will change its ways after Thursday's meeting.

Just one of the 120 economists polled by the Reuters, Bloomberg, and AFX news agencies predicted any result other than a hold - with Nationwide saying that there is a 90 per cent chance that interest rates would stay on hold tomorrow.

"Latest data has made unchanged interest rates even more of a nailed-on certainty this Thursday. Indeed, it is currently odds-on that the Monetary Policy Committee will sit on its hands for many more months to come," said Howard Archer, chief economist at the Global Insight consultancy.

The Bank of England raises and lowers the cost of borrowing in the UK, which affects millions of mortgage-holders and savers, in an attempt to keep inflation at the government's target of two per cent.

Since it last trimmed rates in August last year, no more than one member of the nine-strong MPC has voted for rates to change, with economist Stephen Nickell consistently calling for a 0.25 per cent cut.

However, this month is Mr Nickell's last as an MPC member after 72 months as part of the Bank's policy unit.

And with the lone dissenting voice set to leave, economists believe interest rates are set to stay at their current level of 4.5 per cent for months to come.

"Interest rates may stay unchanged through to the second half of 2007," said Global Insight's Mr Archer.

To take advantage of current interest rate stability by switching to a new mortgage, check out Finance Choices' mortgage comparison tables.

�1,000,000,000,000 - The UK's mortgage debt

Bruce Wayne — Mon, 01 May 2006 10:00:00 +0000

Early next month the total amount of money Britons owe on their homes will pass the �1 trillion (i.e. �1,000 billion) mark.

That is according to figures published today by the Council of Mortgage Lenders (CML), which points out that while a staggering amount, the figure is less worrying than it might at first seem.

While the amount of money Britons owe in mortgages has risen, the value of unmortgaged property has risen far faster. This means that UK home-owners are currently sitting on �3.6 trillion worth of unmortgaged property wealth.

"The �1 trillion threshold is clearly a landmark but it does not have any particular significance for policy-makers or others," said CML director general Michael Coogan.

"Although it is a milestone, it will perhaps soon be forgotten as home-ownership and mortgage lending continue to grow further.

"Over time, owner-occupation has the potential to create wealth and independence for people, and we will continue to work for the expansion of sustainable home-ownership."

The CML points out that housing equity is the largest component of the total wealth that is held by UK residents.

This increase has been fuelled by mortgage lending, with the number of people owning their own home in the UK increasing from 60 per cent of the population 20 years ago to 70 per cent now.

And the growth is not set to stop there, with 80 per cent of Britons wanting to own their own home and the government setting a goal of another million home owners by 2010.

The CML reports that even with this expansion, signs that home ownership has reached its "natural limit" are thin on the ground, meaning the amount of mortgage debt ? and housing wealth ? is set to keep climbing.

Click here to find the best mortgages with the Finance Choices mortgage guide

uSwitch - Saving Money on Your Bills

Barbara Gordon — Thu, 06 Apr 2006 07:50:00 +0000

Who are uSwitch?

uSwitch is a unique service to householders and is an easy way for you to choose, compare and obtain home services (such as gas, electricity, mobile phones) with complex pricing structures and characteristics, within your are.

Is uSwitch impartial?

uSwitch is an impartial and independent service between you and suppliers of services to your home. We guarantee to give you totally impartial advice in the service areas in which we operate. uSwitch works with all suppliers of gas, electricity and mobile phone service providers across Great Britain. You determine your best deal by providing uSwitch with your preferences. You will then be able to choose, compare and obtain the best deal on line.

How much does it cost to change supplier or obtain a new service using uSwitch?

Nothing - our service is free! We are paid a small commission by the supplier company when customers change suppliers with uSwitch. This does not increase the price you pay to the supplier, nor does it have a bearing on the ranking of the products in our output tables.

Will I pay uSwitch any money?

No - uSwitch will not take any money from your bank account or charge you a fee for using the service.

Summary

uSwitch are a company which operates a comparison site where consumers can peruse deals & offers from a variety of different suppliers to find the most economical package tailored to their needs. By showing you how much you could be saving, uSwitch encourage you to, as their name suggests, switch utility providers. They provide this service not only for gas & electricity but also for mobile phones, home telephones & digital TV.

The site is visually pleasing & easy to use. The calculator is comprehensive & has many options for preference selection so the end results are more finely tuned to the customer's specific requirements. The site also provides information about energy, the energy industry & explains terminology.

uSwitch gas and electricity comparisons
uSwitch broadband comparisons

Sort your financial future by age 26

Bruce Wayne — Fri, 21 Apr 2006 07:31:00 +0000

If you are over 26 but have not put in place basic plans to ensure financial security later in life, then start to worry.

That is the message from financial advisers who warn that those who fail to address their financial futures early in life could face a lifetime of struggling to catch up.

Financial advisers believe that the three pillars of financial planning ? saving for retirement, getting on the housing ladder and saving for the future ? should all begin well before a person reaches 30.

According to research by Prudential, they think that people should start a pension at age 22, buy their first house at 25, and start to save at 26.

However, the reality is somewhat different. The average age to marry, which is often a trigger to sort out finances, is 29 for women and 31 for men, while the average age of a first-time buyer is 34.

But if reading this causes you to break out into a cold sweat, you will find solace in the words from Prudential's UK executive director Roger Ramsden, who says it is never too late to start planning for your financial future.

"Planning early is key to a secure financial future, but it is never too late to start. For those of us who do seem past-it, we can still do an awful lot to improve our financial position; whether that is pay more into our pension, save more, or reduce our debts," he said.

"At the bright young age of 26, many youngsters are not yet fully aware of the benefits that starting a pension and savings scheme can bring.

"For one thing, few are aware of the significant tax breaks of a pension. It is only later that they look back and wish they had acted earlier to maximise their finances."

Those under the age of 26 should take heed of the experience of their elders, 42 per cent of whom wished they had reviewed their finances earlier in life. The 25 to 34-year-old age group felt this more than any other group.

Financial adviser Andrea Rozario said the ease of access to credit cards and loans, along with sophisticated advertising techniques, had caused saving to go out of fashion.

She said: "I agree with the advisers surveyed by Prudential in that the earlier you start planning, the better. And while it may not be possible for everyone to have started a pension, bought a house and started saving by the age of 26 ? it should certainly be on their radar."

Interest-only mortgage take-up doubles

Bruce Wayne — Fri, 21 Apr 2006 07:11:00 +0000

The number of interest-only mortgages being taken out has doubled over the last four years, as more and more Britons try to get on the property ladder.

This rise in interest-only mortgages has coincided with a rise in average house prices of 41 per cent over the same period.

Figures from the Council of Mortgage Lenders reveal that in 2002 the percentage of first-time buyer mortgages that were interest-only was 11 per cent, a number which rose to 21 per cent in 2005.

Meanwhile, the average house price rose from �95,356 in 2002 to �160,319 in 2006, according to Nationwide figures.

Interest-only mortgages are often more attractive to the first-time buyer because the monthly repayments are lower than repayment mortgages. This is because the mortgage-holder only pays the interest on the loan.

However, the draw-back is that when it comes to selling the property, all the money borrowed has to be given back, and if the price of the house has fallen since the loan was taken out, this can cause big problems for the mortgagee.

The surge in the number of interest-only mortgages being taken out is a cause of concern for price comparison site moneysupermarket.com, which says it is important for consumer to consider all their options before plumping for the interest-only deal.

It advises that consumers doing so should make sure they can afford to invest in savings elsewhere, in case of a downturn in the housing market.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "I would whole-heartedly urge consumers to think carefully before taking out an interest-only mortgage - even if they are attracted by the lower monthly payments.

"People should only consider this type of mortgage if they are sure they will be disciplined enough to save money elsewhere - as well as setting aside any additional lump sums of cash, like bonuses ? and not touch it."

Research shows that the longer one stays on an interest-only mortgage, the larger the monthly payments will be when switching to a repayment mortgage.

For example, according to moneysupermarket.com, a �150,575 mortgage over 25 years paying interest-only for the first five years with a term tracker of 4.99 per cent will require monthly payments of �627.80.

Switching to repayment after the five years means monthly payments increase to �995.53. Had the mortgage been based on repayment from the start, monthly payments would have been �881.70 - �113.83 less.

Over the course of 25 years, this saving would add up to around �12,000.

Ms Cuming added: "If a homebuyer can afford to repay their mortgage from the off, then I would urge them to consider this option seriously."

For the latest mortgages visit our mortgage guide