Making the most of your mortgagePosted on: 15 January 2013 by Ronan Marrion
Review your mortgage - it could save you a welcome amount of money
It's the time of year when many of us are thinking about renewing and reviewing, along with lots of good intentions to eat more fruit and vegetables and less chocolate - definitely the case for some of our sweet-toothed advisers! With Christmas just behind us, many of us are no doubt thinking of ways to lose a few pounds… and gain a few pounds of the money kind.
But if cutting back on the sugary stuff is proving difficult, there are other ways that you can save money this year, without having to forego any calories.
Your mortgage could be the answer. If you have a mortgage, when was the last time you had it reviewed? If it hasn't been reviewed for a while, then now could be a good time to change that. For most of us with a mortgage, it's probably not something we spend a lot of time thinking about, but just a little bit of extra thought and action could save a welcome amount of money.
What can a mortgage review do? This will always depend on the type of mortgage you have, its terms and conditions and, of course, your personal circumstances.
Reviewing your mortgage
How do you go about reviewing your mortgage? First step: either pick up your phone or switch on your computer, and get in touch with an independent mortgage broker. Why a broker? Is something you might be asking. Don't they just arrange new mortgages? Far from it. An independent mortgage broker is a multi-tasking girl or guy who will not only help you with setting up a new mortgage, but also advise you on your existing mortgage, help you take out a second or third mortgage and advise you on any protection products, such as critical illness cover you might want to consider taking out alongside your mortgage.
Arranging for a review of your mortgage could be a particularly good idea if you are nearing the end of a fixed term period. With interest rates low at the moment (0.5% as of January 2013 and likely to stay that way for the foreseeable future) moving to a tracker rate (a mortgage whose interest rate tracks the base rate) could appeal to you.
Standard Variable Rate
Alternatively, if you have recently come out of a fixed rate period and gone onto your lender's Standard Variable Rate (SVR) you may have found that this benefitted you at first by putting you on a lower interest rate, but rate rises by various banks and building societies have meant you lost out, making now a good time to review.
On the other hand, you might feel that you prefer to continue with a fixed rate of interest, to have the security of knowing that whatever happens to interest rates, you’ll pay the same amount each month. Your mortgage broker can review your current financial position objectively, discuss your aims and objectives with you, and make sure you’ve got the best deal to suit your personal circumstances.
A mortgage should be tailored to fit you; all good independent mortgage brokers will help you make sure this is the case. It may be that your current mortgage deal is the best one, in which case all good independent brokers will tell you this, and you can be assured that you're getting the best value for your money. And, if there are potentially other ways you could streamline your finances, they will guide you towards them.
Even if you are in the middle of a fixed rate period, if you are likely to make substantial savings by moving to a tracker rate or a SVR, it may even be worth your while leaving your fixed-rate period early and paying any applicable penalty charges. Again, your broker will help you decide this by researching whether this will be the most cost-effective option for you.
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