With students returning to university and house prices remaining out of reach for many, first direct believes now is the perfect time for offset mortgage holders to rent out their spare room, save money and reduce the term of their mortgage.
By using monthly rent to make mortgage overpayments, first direct claims the typical homeowner could shave 29 months off their mortgage and save over £1,028 in interest in just 5 years.
The Government's Rent a Room scheme means there are no tax implications for letting a furnished room in your home, up to the value of £4,250 per annum, so homeowners with space to spare could earn up to an extra £354 per month to put towards their mortgage costs.
Richard Tolchard, senior mortgage product manager at first direct commented: "As long as all necessary precautions have been taken, having a lodger is a really easy way for homeowners to earn more cash and reduce the term of their mortgage."
