Save money by reviewing YOUR MORTGAGE

Editor of Themoneyedit.com Kalpana Fitzpatrick shares her expert tips on how to slash your costs if you have a mortgage

While we might all have been doing some kind of spring cleaning recently, doing the same with your finances could give your bank balance a boost. For homeowners, this includes reviewing your mortgage. As this is likely to be your biggest monthly expense, by reviewing it, you could save hundreds of pounds per year.

Remortgage

Last November saw a flurry of homeowners remortgaging in a bid to lock in new fixed-rate deals, just before the Bank of England pushed up interest rates. Rates have crept up again since, but that does not mean it’s too late for you to remortgage and save money on your mortgage costs. Interest rates are still relatively low and you could still move to a better deal, especially if you are on your lender’s standard variable rate. According to experts, you could cut as much a £5,000 off your mortgage with a new deal.*

Stick or switch?

You can move to a new mortgage deal with the same lender in as little as 15 minutes as long as you’re not looking to borrow more or extend the term of your mortgage. It’s usually pretty swift, using what is known as a product transfer, with a minimal amount of admin involved.

But sticking to the same provider isn’t always the best idea – as with many things, you could find a better deal if you shop around.

Should I overpay my mortgage?

If you’re lucky enough to have some savings, you might have thought about overpaying your mortgage, but there are things to consider first. If you have other debts, such as credit cards or loans, which have high interest charges, use your savings to tackle those first. Also, be sure you won’t need access to that cash and can still afford your current lifestyle. It could be worth looking into getting an offset mortgage instead, which uses your savings to help reduce your interest payments. So, if you’re paying interest on £200,000, and have £50,000 in savings, then the offset mortgage means you will pay interest on £150,000 instead. But you will not earn interest on your cash savings.

Use our mortgage overpayment calculator at themoneyedit.com/ mortgages/mortgageoverpayment-calculator to see what impact overpayments will have on your loan.

Mortgage holidays

If you’re feeling the great financial squeeze of 2022, and need breathing space, then speak to your mortgage provider and see if it can pause payments. Remember, you will still have to make up the payments at a later stage.

REMORTGAGING YOUR HOME IS ALSO A WAY TO FUND IMPROVEMENTS LIKE AN EXTENSION OR NEW KITCHEN