Shop
around for the best deal.
Newspapers and websites are good places to look for regularly
updated best buys. You can see our
best buy tables here
Make
sure that your mortgage suits you. Rates can vary enormously
between lenders – anything between 4.5% for fixed rate
deals to 6.5% - that's a difference of up to £1,600
per year on a £100,000 loan!
If
you already have a mortgage, check your existing lender's deals
- it’s often cheaper to move mortgage within your current
lender's range of products than to go outside. Go and talk to
the mortgage advisor and ask for a better deal – the threat
of losing a customer can have a surprising effect on a hard-nosed
lender!
Beware
additional costs: you may have to pay a penalty if
you move your loan. Read the small print
of any new loan to ensure the lender isn’t hiding some
of the costs in order to offer a tempting rate.
Compare
all the costs of the mortgages you’re interested
in with your existing mortgage over a period of a couple of
years. The easiest way to do this is via the
APR
Shop
around for better rates on your insurance premiums
as well. Rates for the kinds of insurance associated with your
mortgage: life insurance, mortgage protection insurance, critical
illness protection, are often over-priced.
Check the internet and in newspapers for better deals.
IMPORTANT
NOTE
Many websites don't make it clear that filling in their enquiry
form means you might be credit checked. This puts you at
risk.
Lenders
often assume an enquiry to a rival means you were turned down
- and not that you are in fact carefully shopping around and
rejecting the bad deals.
The
best way around this significant problem is to ask
an independent mortgage adviser. Without
making an actual application they will know which deals are
best for you. They will also know how likely you are to be accepted
by the lender.
Rule Two: Watch the rates.
Obviously
the rise and fall of interest rates can have a big impact on
your mortgage repayments but what should you do if rates change?
Many
people will react to a period of interest rate stability by
moving to a
tracker mortgage and to
a period of interest rate rise by opting for the stability of
a fixed rate.
Wrong!
Fixed rate mortgages are
usually better when prices are low or stable and rise to protect
the lenders investment when rates rise. Although it might seem
counter-intuitive to do so, consider cheap fixed deals when
interest rates fall.
If
you do take out a fixed mortgage at a favourable rate remember:
you’ll have to shop around when the fixed period
comes to an end to avoid a sudden, unwelcome, hike
in your payments.
With
average standard mortgage rates currently running at 6.8% a
25 year repayment mortgage on a loan of £100,000 would
cost £210,600. You will pay more than the original loan
in interest – a whopping £110,600!
You
can cut the
interest you pay, at
the front end as it were, by getting a better deal on your interest
rate but you can also pay less interest by
paying the debt off more quickly.
Some
mortgages allow the borrower to pay more each month or to pay
off lump sums:
Read
enough? Just want a quote? To get
your best mortgage quote quickly and easily we can
put you in contact with a recommended mortgage adviser. It's free,
completely confidential and there's no obligation at all. Simply
fill out the form below
