Stub out the interest on your mortgage
March 14, 2007 by admin
Filed under News, News-Mortgages
People who smoke are prolonging how long it will take them to pay off their mortgage.
That is according to mortgage broker John Charcol which says many people could save themselves thousands of pounds by stubbing out.
With No Smoking Day (March 14th) fast approaching, the firm has highlighted the fact that someone who smokes could save £27,000 in interest by quitting.
The idea is that a former smoker uses the money he or she used to spend on tobacco and puts it towards paying their mortgage off early.
On a 25-year mortgage this will lead to savings of over £27,000 and will reduce the term of the loan by eight years.
“When smokers look at what quitting can do to their finances it may provide that added incentive to finally stub out the habit,” remarked Katie Tucker from John Charcol.
“A 20-a-day smoker can save around £1,825 a year by giving up which, in itself, is incentive enough. Yet when you look at what overpaying by this amount can do to a mortgage, it is even more of an enticement.
“Even someone with a relatively small mortgage of £100,000 will pay £27,417 less in interest,” she added.
John Charcol points out that heavier smokers have the potential to save more money, with someone on 40 cigarettes per day saving around £45,000 on a £100,000 mortgage and shaving 14 years off the loan term.
People who give up smoking not only protect their health but also see a wide range of financial benefits.
A recent report by Sainsbury’s Bank found that an ex-smoker can save up to 48 per cent on a life insurance policy.
