49% of people have reported being worried about the effect of rising interest rates on their mortgage, and due to the current climate, highlighting any one best way to reduce mortgage costs is difficult as repayment rates rise across the board.
However, that doesn’t mean that there is nothing that can be done to improve your situation.
Melanie Whiting, Mortgage Manager at Norton Finance has highlighted four ways in which people can look to reduce their expenses from their mortgages:
1: Take an extended term. While increasing overall expenditure on a mortgage, extending its term is the easiest way to reduce the monthly cost of mortgage repayments. This is also worth looking at even if you’re further through your career as lenders are more flexible with lending into retirement now.
2: Opt for interest-only payments until rates settle further - we are expecting to see more part and part mortgages moving forward.
3: For older customers, considering a lifetime mortgage where it is possible to pay either interest only, or roll up to have no payments if they are struggling is a really good option.
4: People coming out of their fixed-rate mortgages could benefit by remortgaging as the SVRs have increased, and they can also benefit from getting a broker to compare the best available offers, whether that be another fixed rate or a tracker.
Whiting advises that “customers should contact a broker to ensure they get the best deal available as brokers can compare the full range of mortgage products without the hassle of shopping around."
She adds: “As always, they need to ensure they are remortgage or mortgage-ready by making sure they have a good credit rating and are not over limits on overdrafts or credit cards etc. Due to the higher cost of living, lenders have altered their affordability assessments so customers should go through their bank statements and assess any unnecessary payments that can be cut from their budget.”
The amount that can be saved depends on an individual’s situation, but for some, consolidating could save anything from a few hundred to thousands of pounds per month by considering a mixture of the above.
