Reaching the end of your deal? We could help reduce your mortgage costs

If you’re coming to the end of your mortgage deal, there could be ways of saving money on your next mortgage compared with dropping to the standard variable rate or moving on to your lender’s next deal.

Speaking to us could save money on your next mortgage

With the impact of interest rates on mortgage payments, we understand the importance of saving money wherever possible. By getting in touch, we would listen carefully to your needs and provide relevant, bespoke mortgage advice that could lower your monthly payments when you come to re-mortgage.  

Five options we can review with you

By extending the term of your mortgage loan, the amount of debt is spread over a longer period, bringing down the potential cost of your monthly mortgage payments. The term can be reviewed whenever you remortgage and shortened if rates drop or if your income and affordability improve.

The typical mortgage term is 25 years, but 30 and even 40-year terms are available.’ (1)

However, by increasing the term, it’s important to note that this would increase the amount of interest due over the lifetime of the mortgage. This means you will end up paying more to borrow the same amount unless you make overpayments.

With this type of mortgage your outstanding mortgage balance will not reduce (unless you make any overpayments) but it could help to reduce your monthly payments if your financial situation feels tight right now.

Lenders would usually need a repayment plan to demonstrate how you intend to pay off the debt. However, we may be able to negotiate switching to interest only for a short period of time, reverting to a full repayment mortgage when the potential monthly loan cost becomes more manageable or when you need to remortgage for a new deal.

Our advisors will talk you through whether this option would suit you and your circumstances, now and in the longer term.

Debt consolidation is a way of paying off credit cards and loan payments by borrowing money against your home and using the funds to pay off your debts. Paying off high-interest short-term debts could help you to regain control over your finances.

However, debt consolidation is not a long-term solution and may not be right for everyone. We can help weigh up the pros and cons when considering if this approach is suitable for you. 

Read more about debt consolidation HERE

Paying off a portion of your mortgage could save you money by reducing your monthly repayments, either in the short-term or longer term, dependant on your current deal. 

There are different ways you can approach this.

  • You can overpay during the deal, but this could carry penalties. However, many deals have the option to overpay on their fixed rate of 10% of the balance every year. This could reduce your monthly payment, with the term staying the same, or you could shorten the term and retain the same repayment amount 
  • At the end of the mortgage deal, you can pay part of your current mortgage balance off, with no restrictions on the amount that can be paid off, before signing up to another mortgage deal. This can usually be done if you’re on a standard variable rate mortgage and will be dependent on the terms of the deal. 

This could be a suitable option for some mortgage holders where the requirements from your current home have changed. It could be that the need for extra space and a larger garden has lessened, or you’d like to relocate to an area where house prices are cheaper.

By selling up and buying a property that is smaller or in a different location, the outstanding loan amount could be reduced, or the mortgage paid off entirely.  

We are here to help you make the right choice

There are numerous options to think about when you’re looking at saving money with your mortgage, including alternatives that might not readily spring to mind. 

Our advisors are fully trained, weighing up the pros and cons of each option and talking you through the process step-by-step to help find a solution that matches your requirements.

Proud to offer extensive choice

We are not tied to any lender and have access to specialist mortgage providers, many of which are not available anywhere else. This enables us to find a product that’s suitable for your unique circumstances. 

Mortgage advice that’s
safe as houses

There are numerous options to think about when you’re looking at saving money with your mortgage, including alternatives that might not readily spring to mind.

You can rely on us to provide the right advice for you. Call the team on 01565 874 246 or book an appointment below.

Think carefully before securing any other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but will be agreed with you before proceeding.

Source: https://www.bbc.co.uk/news/business-65984415

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