In spite of evidence showing that overpaying on a mortgage can be more beneficial than saving money, twice as many homeowners are choosing to save regularly rather than take advantage of low interest rates to pay down their mortgage, according to research from First Direct bank. Their survey of just over 1,000 mortgage holders found that 42% save money regularly, but just 21% regularly overpay on their mortgage.

However it also found that nearly a third don't know the current interest rate payable on their mortgage while 43% don't know the total cost of their mortgage. Around 25% are in the dark as to whether or not they can overpay on their mortgage, and another 15% don't know their outstanding balance. It could be that people simply are unaware that they can overpay their mortgage, but some also prefer the flexibility of having a savings account in case they need to access money quickly, even though when asked how they would use any spare cash, most answered they would overpay their mortgage. Men are more aware than women as to whether or not they can overpay their mortgage and the amount allowed, and they are also more likely to know the total cost of the mortgage.

Apparently 86% of those aged between 25 and 34 save regularly or are considering doing so compared with just 62% of over 55s. Those aged between 25 and 34 are also the second most likely to overpay their mortgage with 22% choosing to do so compared with 24% of those aged between 45 and 54.