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Stop smoking to save on mortgage

Borrowers who stop smoking and put the cash saved into their mortgage could pay off the loan more than 13 years earlier, according to Yorkshire Bank.

With No Smoking Day set for March 14, Yorkshire has calculated that a 20-a-day smoker could pay off an extra £30 a week into a flexible mortgage if they kicked the habit, saving thousands of pounds in interest.

The National Australia Bank subsidiary says a reformed smoker on its rapid repay flexible mortgage could pay off an additional £130 a month, meaning a 25-year loan of £50,000 could paid off 13 years and four months early. As well as the obvious health benefits, the bank says this would save an ex-smoker almost £38,000 in interest payments.

This is because most flexible loans allow lump-sum payments and calculate interest daily and any extra payments made immediately reduce the overall balance of the loan.

Mortgage manager Phil McCroakam says: “I think that most people would consider this an incentive to stop smoking as it is a win-win situation.

Ex-smokers will own their home quicker, save nearly £38,000 and increase life expectancy.”

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