Six steps to help you secure a cheap loan NOW

1 Check when your existing loan deal ends

MILLIONS of borrowers are overpaying because they have unwittingly moved onto a standard variable rate.

In total, UK households are wasting £22 billion annually as a result of putting up with a lender’s standard rate (on average 4.9 per cent), according to research by the online mortgage broker Trussle.

2 Act early

SWITCHING a mortgage can take weeks so leave adequate time to consider all options and avoid ending up on a standard variable rate before a loan term runs out.

3 Do your homework

READ what commentators say about interest rates – and which way they could move. Having even a small understanding of the bigger picture can help with making a more informed loan decision.

4 Compare deals

AVOID misplaced loyalty to a lender as better deals will be available elsewhere. Contact a mortgage broker via unbiased.co.uk, vouchedfor. co.uk or thepfs.org.

5 Consider other features

RATE is important but some pricier loans come with other advantages.

Ray Boulger of broker John Charcol says: ‘With savings rates so low it is worth thinking about an offset mortgage.’

These allow borrowers to use any savings to offset the loan amount and therefore pay less mortgage interest.

Boulger points to offset deals from Coventry Building Society, including a 10-year deal at 2.75 per cent. He adds: ‘You can use rainy day savings to reduce the mortgage but still access the money if you need it.’

6 When to stick

IF YOU are one of the hundreds of thousands of borrowers lucky enough to have a lifetime tracker loan, where the rate paid rises and falls in line with base rate changes, then now is not the moment to switch. Those who have held these loans since bank base rate started to fall nearly nine years ago have seen repayments drop by a third.