MORTGAGE TIPS



Want to take years off your mortgage? Doesn't everyone? Yet, surveys show that we're lazy when it comes to getting the best deal for our mortgage money. Here's 10 ways to reduce your monthly payments:
  • Get a better deal - There are loads of great offers on the market. Check our mortgage best buy tables to find out who's offering the best deals this week. You can get a good short-term deal and then switch again. Remember that the ball is in your court - your existing lender will be keen to keep your business and will probably offer you a good deal as well.

  • Get a cheaper standard variable rate - Mortgages usually revert to these rates once a discounted or fixed period has expired. As with mortgages in general, they can vary from lender to lender so it is worth shopping around for the best deal.

  • Change your interest calculation - Daily interest calculation has been established for a while in other parts of the world but more and more lenders over here are switching to it. Basically, the advantage of switching to this calculation is that if you make a repayment it immediately impacts on the interest accruing on your mortgage.

  • Remortgage for a smaller loan to value - Chances are your property has increased in value since you took out your original loan. Therefore, the percentage of the loan to the value of your property will have decreased as well. So it could be well worth investigating whether you can get a better deal - many lenders offer significantly better terms for people borrowing less than 75% LTV. Make sure you have your property valued properly though, and shop around for a lender that will cover your valuation fee.

  • Reduce your mortgage term - If you feel you can afford to pay out extra each month, you can reduce the term of your mortgage, which will save you on interest.

  • Don't take out a Mortgage Indemnity Guarantee (MIG) - MIGs are now usually only charged on loans of 90% to value or more and there is a campaign to have them scrapped altogether. A MIG is a one-off payment made to the lender that protects them if you fail to keep up your repayments and your home is repossessed. If you can avoid paying for one, do, it will save you money.

  • Get cheaper household insurance - One of the easiest ways to reduce your household outgoings is to shop around for your buildings and contents insurance. It's all too easy to buy from your lender as it's convenient to have everything tied up with the one company. But search the market and you could save a packet.

  • Check your mortgage payments are correct - It may seem stupid but auditors MortgageChek say there's a one in ten chance you could be paying more than you should. Do the maths.

  • Ensure you review your mortgage regularly - Perhaps it isn't the way you'd choose to spend your free time but regular reviews and possibly remortgaging will ultimately ensure you pay as little as possible in interest.

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Mortgage Buying Tips