Overpay? A misselling scandal in the making

I've been told a number of mortgage lenders are advising borrowers to use the low interest rates they're getting to make overpayments on their mortgages.

Normally, I'd say fine - it will reduce the total interest paid (though are all these lenders calculating the monthly payment on a daily basis, or will they apply the proceeds only at the end of the year?).

But in the current economic climate, householders with small equity and small savings should avoid it.

If you lose your job, I doubt the bank will take 'but I overpaid last month' as an excuse for missing a payment. Borrowers could lose the house - AND the overpayments.

Far, far better to put the difference in a savings account, even at minimal rates of interest. At least then, if redundancy does come, there's a few months' mortgage payment in the pot.

I almost wonder whether non-personalised, general advice to repay constitutes a misselling scandal in the making.