If you’re looking to remortgage or buy a home for the first time, you’ll want to find the lowest interest rate possible. But Instead of choosing the first mortgage you see, consider a few simple factors that could potentially save you thousands of pounds.
1. Check your current deal
It’s a good idea to go through your existing mortgage offer and look at the current rate, plus your monthly repayment and amount of loan outstanding, any additional charges and fees, the mortgage type, deadline, term, and your loan-to-value. Comparison websites have now made it easier than ever to compare what’s out there. Just enter your details and scan the list of top deals. Could a new deal or provider save you money or are you better off staying put?
2. Beware of Standard Variable Rates (SVRs)
If your current fixed mortgage deal comes to an end, you’ll automatically be transferred onto your lender’s standard variable rate. Usually, this means that your payments will increase as the SVR is much higher than the rate your fixed payments were based on so why not shop around for a better deal?
3. Improve your credit score
A high credit score is one of the best ways to get a lower interest rate. While there isn’t a quick fix to improving your credit rating, there are a number of things you can do that will help, such as joining the electoral register and paying monthly bills on time.
4. Ask your lender
Talking to your mortgage provider and asking for a lower interest rate can be a very successful tactic. You won’t know if you don’t ask.
5. Use a reputable mortgage broker
Mortgage brokers have access to information that’s unavailable to consumers so they should be able to match you with the ideal mortgage.
6. Untie your home insurance
Paying for your home insurance and mortgage separately can often be cheaper than combining the policies. Find out how much you’re paying and use a comparison site to see if you can save.
7. Review your term
Choosing to pay your mortgage over a longer period can reduce your monthly payments and give you more money from month to month. But, remember that increasing your term will cost you more over the long term.
8. Get a deal that charges daily interest
Mortgages that charge interest daily compared to annually cost less over the term. This is because every payment goes towards the balance of your mortgage. When annual interest is calculated, lenders use the mortgage balance at the start of the year, which ends up costing you more in the long run.
Taking time to research different mortgages offered by banks and providers can save you a huge amount of money over time.
You should also look into the terms and conditions of each type of mortgage and make sure you read-up on everything before making a final decision.