You will undoubtedly have read the news about how mortgage interest rates are at record levels and the cost of mortgage repayments are increasing when you remortgage or purchase a property.

It’s certainly a challenging time, but with everyone in the same boat at least you can say ‘I’m not alone’.

We are regularly in conversation with our customers about what they could do to help keep their mortgage payments as low as possible in a time of increased mortgage rates.

It’s at times like this where your broker is worth their weight in gold because you’re not tied to look at just the one product.

Before we look at what can you do to keep mortgage repayments to a minimum, it’s important to remember how we have got used to record low interest rates over the past few years.

Whilst it looks like we will need to get used to slightly higher rates for the time being, there are a couple of tips on keeping your repayments as low as possible.

Pay off a chunk of your loan

Paying off a chunk of your loan when you remortgage (or borrowing less in the first place) will mean your gross loan amount is lower. You may also wish to consider making capital overpayments as this will reduce the outstanding balance.

Reducing the loan amount will mean your mortgage interest payments are lower but be careful about things such as early repayment charges.

 

Consider paying early repayment charges

If you are coming up to a remortgage, it may be worth paying the early repayment charges as the amount you pay could end up being less than the potential increase in monthly cost.

It’s important that you speak with your broker about options such as this need to be carefully considered.

 

Switch to interest only

Switching to interest only will not reduce your overall loan, but it will reduce payments. It may be possible to switch if you are in your fixed term as well and it’s something you can discuss with your lender.

The important thing to consider about interest only is that the outstanding balance will still need to be paid at some point (whether through moving to a repayment mortgage, clearing with savings or selling).

 

Extend your term

This may not be an option for everyone, but lenders may be willing to extend your mortgage term, therefore reducing your monthly payments. Extending your term may mean you will pay more interest overall.

Typically, mortgages are over 25 years but there are also mortgages with a 30-year term or longer. Speak with your broker about this option if you would like to consider it.

 

Fix for longer to give more certainty

Choosing to fix for five years or longer may mean you are able to get access to a better rate and it will also give you certainty for a longer period.

If you’re on a variable rate, fixing is likely to reduce your payments and will also give more certainty on monthly repayments.

Can we help?

If you are on a variable rate, purchasing a property, coming up to a remortgage or looking at how to reduce your overall mortgage payments then we’re here to help.

Our team are experienced in providing homeowners and investors with the most suitable mortgage products. You can either call us on 01322 553282 or contact us online.