nifty & thrifty: how to get a cheaper mortgage, plus high-street luxury

You could save thousands of pounds by switching mortgage deals

Avoid penalties

It can take time to switch on to a new mortgage rate, so start looking roughly three months before your current rate expires. Planning ahead will save you being automatically transferred onto a more expensive variablerate mortgage. But don’t switch too soon, as you may have to pay an ‘early repayment charge’, which can cost up to 5% of your existing loan.

Low rate doesn’t always equal cheap deal

Lenders will often use low ‘headline rates’ to draw in customers by making deals seem attractive. However, they typically have larger fees, some over £1,000, which increase the overall price of the mortgage. It’s better to look at the total cost – taking into account any associated fees and special offers, as well as the rate, to get the cheapest deal overall.

Don’t be scared to fix

Two year fixes usually offer the lowest fixed interest rates, but after the Bank of England increased its base rate and with more rate rises anticipated in 2018, many people are now looking to lock into the current low fixed rates for longer. Opting for a five-year fixed deal could be a good strategy to keep your mortgage payments down.

Use a broker

A mortgage broker can help you navigate the mortgage-market minefield, make the application for you and chase the lender on your behalf – saving you hours of time and often money, too. Brokers usually charge £200£400 in fees. Find one at findamortgagebroker.co.uk.

Two in five Brits with mortgages have not changed their deal in the last five years. But those who switch make an average saving of £2,400 a year – more than changing all other bills.