A Suffolk couple says they have found a simple way to chip away at their mortgage using a cashback app linked to everyday spending ahead of a potential interest rate hike from the Bank of England.
Analysts are sounding the alarm that mortgage rates could spike later this year as the central bank could be forced to raise the cost of borrowing if inflation goes up in response to the US-Iran war.
Nick and Sarah Rutter, from Kedington, have been using the Sprive app to turn routine purchases into small overpayments on their home loan.
Mr Rutter, who runs an IT business, said he came across the app on social media and decided to try it as a low-effort way to reduce their balance.
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He shared: “I saw a post on Facebook and thought it sounded like an easy way to make a dent in the mortgage without changing our lifestyle.”
The couple took out a £190,000 mortgage in 2013 and currently pay £570 a month. Like many homeowners, they had been looking for straightforward ways to bring down the balance and reduce the amount of interest paid over time.
Since signing up in February, they have combined small monthly overpayments with cashback earned on spending. They put aside £25 a month, with a further £20 to £30 typically generated through the app and automatically directed towards their mortgage.
Mr Rutter said the appeal was that it required little change to their habits. “We’re just using it for things we’d be buying anyway,” he added.
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The couple also received a one-off boost after winning £570 in a promotional prize draw linked to the app, which they used to make an additional overpayment.
Based on their current approach, they estimate they could reduce their mortgage costs by around £7,800 over the full term, although this depends on interest rates and continued use.
The app’s chief executive, Jinesh Vohra, said higher borrowing costs have made overpayments more attractive for some households, with mortgage rates rising in recent weeks amid market volatility.
He said regular overpayments can help borrowers cut interest costs and shorten the length of their loan, though this will depend on individual circumstances.
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Mr Vohra said: “Data showing that a typical mortgage is now £788 a year more expensive than before the Iran war began underlines just how sensitive the market is to global events.
“With rates climbing from below five per cent to well above that level in a matter of weeks, borrowers are once again facing a far more expensive lending environment than many had hoped for at the start of the year.
“The expectation may still be that the Bank of England will hold the base rate at 3.75% this week, but beyond that the outlook is becoming increasingly uncertain. Geopolitical tensions and market volatility are clearly feeding through into mortgage pricing, and lenders are reacting quickly by repricing deals and pulling their most competitive products.
“For homeowners and buyers, this makes it incredibly difficult to try and time the market or wait for the ‘perfect’ rate. Instead, it’s often more productive to focus on the things you can control and build resilience into your finances.
“And for borrowers who feel stretched by rising costs, tools like Sprive can help ease the pressure. By turning everyday spending into cashback that goes directly towards mortgage overpayments, homeowners can continue chipping away at their balance without needing to find extra room in their monthly budget.”