Daily dilemma

By THIS IS MONEY
Updated:

 

My parents have three years to run on a standard Halifax mortgage with interest calculated annually. Would it be worth their while switching to a daily rate for the final three years? It's an endowment mortgage worth £17,000. LC, Aberdeen.

David Hollingworth of London & Country Mortgage Brokers, says: As your parents have an endowment mortgage they will currently be paying interest only and so there is no benefit for them in moving to daily interest calculation. You only benefit from this if you are repaying capital as well as interest. But as Halifax customers on the standard variable rate, they can apply to be converted to the Halifax SVR2, currently 6.75% - which is on a daily interest basis. This will save them £382.50 over the remaining term of their mortgage. It is not really viable to look around for cheaper deals elsewhere due to the short term left on the mortgage. Lenders usually have a minimum term of five years.

Most watched Money videos