Your mortgage repayments can account for a large amount of your monthly income and can sometimes appear daunting, especially for first time buyers.
If you’re curious to know how you could potentially lower your mortgage repayments each month, there is more than one way to achieve that goal. Here are five ways to reduce your mortgage repayments:
- Extend your repayment term – Extending your mortgage term will cut the monthly mortgage payments, except for interest only mortgages. The downside to this is that you will have the debt for a longer period of your life and it will cost you more overall due to the additional interest.
- Remortgage to a lower rate – Generally speaking, the lower rate of interest you have, the lower monthly payment you’ll be paying. When your initial fixed rate term ends, it’ll be worth having a look to see if there are better rates available for you.
- Pay off larger chunks of your mortgage whenever you can – You can cut your mortgage payments in the long term if you are able to make larger, one-off overpayments should you receive a windfall or annual bonuses. Essentially, you’ll be reducing the amount of debt you have to pay back, leaving you with a reduced monthly payment. It’s worth checking with your lender first to see if there are any penalties to overpaying.
- Put down a larger deposit – Of course, this is much easier said than done. However, in an ideal world, having a larger deposit with lower the LTV meaning you may be eligible for a better interest rate, lowering your monthly payments. Take-aways, take-out coffees and other non-essential items over the course of a year can all add up to quite a sizeable sum when you’re saving for a deposit. It might therefore be worth the sacrifice for a short period of time in order to reduce your mortgage repayments over the long-term.
- Don’t stay on a standard variable rate (SVR) mortgage – The SVR rate automatically kicks in when your fixed term ends and is usually a higher interest rate than your initial fixed term rate, however, this isn’t always the case. Therefore, when your fixed rate term ends it’s worth exploring your remortgaging options to see if you can secure a better rate.
Here at Mortgagez, our team of fully qualified mortgage advisers is on hand to help you every step of the way in obtaining a new mortgage, and our service won’t cost you a penny when you go via our online portal. Visit our website today and obtain a quick quote with our online mortgage rate tool to see how much you could save on your next mortgage.
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PLEASE NOTE: Article written 26th January 2022. Information contained within this article is likely to change and therefore should not be relied upon or form part of any form of decision making without seeking professional advice. *
YOUR HOME MAY BE REPOSSESSED IF YOU DON’T KEEP UP REPAYMENTS ON YOUR MORTGAGE
Any guidance and/or advice contained within this document is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK. Any technical or regulatory information contained within this document was correct at the time of producing it but as it may be subject to change it should not be exclusively relied upon when making a financial decision. The Financial Conduct Authority does not regulate advice on Buy-to-Let mortgages. Mortgagez is authorised and regulated by the FCA no. 828291.
Article written: January 2022 260122 MZ000241
