Big plans for smaller mortgages

Standard Life research shows that 2008 looks set to be the year in which up to 9.6 million Brits give their finances a spring clean and look to shed pounds from their mortgage. It is predicted that 97% of these homeowners think that it would be a good idea to put a strategy in place to achieve this goal, and will turn to intermediaries for advice.

Allison Crawford, Director of Lending, Savings and Investments at Standard Life Bank, said: "Starting a new year is a great opportunity to look at the goals you want to achieve in the year ahead and plan to make these happen. Our research found that being mortgage free is the biggest aspiration for many people. Clearing your mortgage entirely may not be suitable for all homeowners, as mortgages can be a savvy financial planning tool when finance is needed."

In light of this research, Standard Life Bank has compiled 5 tips for a financially strategic start to the year:

• Mortgage free or mortgage minimal? If your client has financial plans on the horizon e.g. helping kids through university, then perhaps being mortgage free is the wrong route
• Consider the flexible features available with a mortgage such as offsetting or overpayments
• Go above and beyond. Your clients can overpay with lump sums or regular deposits to lower monthly payments or cut years off the term
• With offsetting interest is calculated daily, so any savings offset against a mortgage will reduce overall mortgage costs
• Go for a double whammy of offset and overpay. By combining both features your clients can potentially reduce their mortgage term, mortgage costs and save on tax.

With these in mind you should contact an independent mortgage advisor to discuss your options.