Way to cut your mortgage payments and keep a roof over your head
Interest rates are set to go up yet again, after the Bank of England pushed up base rate this afternoon to the highest level seen for 15 years.
If you’re a mortgage borrower, this is going to hurt, whether right now or in future.
I can’t get my head round the Bank of England pushing up base rate to shrink inflation.
It feels like using a sledgehammer to inflict immense pain on a small part of the population.
Soaring interest rates hit mortgage holders hardest. Yet only 28% of UK properties are owned with mortgages or loans, according to the Office for National Statistics. The rest are wholly owned (36%) or rented, whether privately or as social housing.
Of those with mortgages, 75% are on fixed rate deals. So only 7% of UK properties have variable rate loans, and feel the immediate impact of recent rate rises. Homebuyers also struggle with the stress of seeing rates rises, and deals disappearing from the market.
Anyone on a fixed rate mortgage faces a ticking time bomb – waiting to see how much their payments will go up when their current deal ends. Loads of people who took out cheap two-year fixed-rate mortgages at under 2% now face mortgage deals fixed around 6%, which will add hundreds if not thousands of pounds to their monthly payments. When I was discussing the topic on Radio 5 Live this morning, a caller was looking at an increase of £600 a month on her mortgage bills – that’s £7,200 a year more to scrape together from taxed income. It’s even harder to find the extra cash when so many other bills, particularly for food, fuel and energy, have shot up at the same time.
Here are seven ways to cut your mortgage payments, if you’re facing rising bills:
1. Extend the length of your loan
Traditionally, mortgages ran for 25 years, so they were done and dusted well before retirement.
But if you borrow for longer, it will bring your monthly payments down (phew).
However, it will also mean you pay more interest in total, over the longer time frame.
It could also be a problem if you’re stuck working until later in life, so you can afford your mortgage. This week, Halifax, Britain’s biggest mortgage lender, extended the maximum working age it will consider for mortgages to 75 – well after people start drawing their state pensions. Working well into your 70s is a pretty bleak prospect for anyone who doesn’t completely love their job.
2. Switch temporarily to interest only
Moving from a repayment mortgage to an interest-only loan will definitely bring your monthly payments down – because you’re only paying the interest, not chipping anything off the original purchase price of your property.
It can tide you over tough times, but don’t stick your head in the sand. Switch back to a repayment loan as soon as you can afford to, or come up with rock solid plan on how to pay off the remaining balance. Otherwise, you could get to the end of your mortgage term still owing loads of money, and be forced to sell the roof over your head.
3. Overpay your mortgage
While you can afford it, chucking extra money at your mortgage will lower future payments in two ways.
First, if you owe less, you’ll pay less interest. Second, if you owe less money compared to what your property is worth (known as the ‘loan to value’) you may qualify for lower mortgage rates.
Best Buy rates are typically only available when borrowing less than 70% or 75% of the property value. It’s definitely worth checking if the combination of rising house prices and overpayments could push your loan to value into the realm of cheaper deals.
Try upping your payments right now, to the expected level on a new deal. If you get a pay rise, increase your mortgage payments before you get used to spending the extra cash. Just before remortgaging, chuck any savings, bonuses or inheritance into bringing down your balance. As a general rule, if you earn less interest on your savings than you pay on borrowing, it makes sense to use savings to pay down loans. Just make sure you hang onto some emergency savings, ideally three to six months of living expenses.
4. Use a mortgage broker
When money is tight, it’s particularly worth using a mortgage broker to find a loan, rather than just rocking up at your local bank.
Mortgage brokers have access to loans which aren’t available to ordinary people. They will crunch all the numbers for you, comparing interest rates, fees and freebies such as free valuations to find the best deal.
A good broker will be familiar with which lenders are more likely to approve a loan if for example you’re self-employed or don’t have a perfect credit history. You can even find fee-free mortgage brokers such as L&C, where you won’t have to pay for the privilege, as they stick to commission from the mortgage lenders.
5. Give your finances a makeover
Now, more than ever before, it’s worth making yourself into a model borrower.
Check your credit records well before trying to arrange a mortgage, rather than leaving it to the last minute. You can check your credit report with the three major credit agencies for free using Clearscore for Equifax, the MoneySavingExpert Credit Club for Experian and Credit Karma for TransUnion. That way, if you discover any mistakes or issues, you’ve still got time to get them sorted out.
Get yourself on the electoral roll. Don’t apply for credit in the 3 to 6 months before applying for a mortgage, as this can lower your credit score – so no new current accounts, credit cards, or personal loans, especially payday loans. If you do have credit card balances, try to pay them down, and avoid going into your overdraft.
Then work on squeezing down any expenditure, to show you can afford higher mortgage payments. Check out my post on How to slash your budget to the bone for inspiration.
6. Move house
If money is so tight that you just can’t afford your mortgage payments, it may be time for really big decisions. Selling up and moving to a cheaper property, whether somewhere smaller nearby, or somewhere with lower house prices, can make your mortgage more manageable.
As someone who moved from London to Suffolk to improve our finances and clear our mortgage, I’m not trying to downplay the hassle and expense. It can be a massive wrench, if jobs, schools, family and friends are affected. But it might be worth it, if it stops financial nightmares.
7. Seek help
Whatever else you do, don’t skip mortgage payments without talking to your lender. That can really mess up your credit history, and chances of borrowing in future. Your lender may be able to offer alternatives such as payment holidays, in addition to options above such as extending your term or switching to an interest only loan. It can also be well worth talking to one of the not-for-profit debt help charities, such as StepChange, Citizens Advice, CAP or National Debtline. They may be able to negotiate with your creditors on your behalf.
Now – over to you. Are you affected by the interest rate rises? If you have a mortgage, how are you coping?
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Thanks for the tips, Faith. This will help me budget my savings and income.
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GET BACK STOLEN CRYPTOCURRENCY FROM SCAMMERS THROUGH OMEGA CRYPTO RECOVERY SPECIALIST
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What To Do If Your Cryptocurrency Is Stolen.
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RECOVER YOUR STOLEN FUNDS FROM ONLINE SCAMMERS
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Stay Safe
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RECOVER YOUR STOLEN FUNDS FROM ONLINE SCAMMERS
A financial regulator, private investigator, and funds recovery organization goes by the name WIZARD LARRY RECOVERY. Their areas of expertise include issues involving cryptocurrency, recovery scams, fake investment schemes, and ethical hacking. There is no need for an upfront payment. Additionally, they are professionals in credit repair (EQUIFAX, EXPERIAN, TRANSUNION). To begin, send an email to the support team at the address provided below.
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All software tools needed to execute RECOVERIES from start to finish are available in stock.
Kindly NOTE that the available tools does NOT apply to CREDIT FIX.
Be ALERT to FALSE reviews and testimonies on the internet, the authors and perpetrators unite to form a syndicate.
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How to recover Cryptocurrency ; Binary Option & fake investments RECOVERY
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Thank you,
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How to hire a hacker to recover Lost Cryptocurrency.
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Contact Info
WhatsApp; +1,2,0,5,3,3,6,1,0,2,0,
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Hello everyone, i am hallen from Montreal , Canada. I was involved in a cryptocurrency investment platform and I invested a huge amount of my money into this platform with hopes of a successful return, unknowing to me that this platform has been defrauding the victims of their investments. It was devastating for me when I found out about their dubious ways. While scrolling through the internet, I saw many reviews about computer specialist recovery security network and how successful they have been in recovering cryptocurrency from fake investment accounts, I was very skeptical about it at first but after my whole research about computer specialist recovery security network, I found their service to be reliable and trustworthy. I contacted them and provided all the information about the whole cryptocurrency transactions, and in less than 72 hours, computer specialist recovery security network was able to recover my cryptocurrency. I’m thankful for their assistance and wonderful service.
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Hello
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W/A….”+(1)(25.25.12)(03.91)”
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CRYPTOCURRENCY RECOVERY EXPERT
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James Miller Recovery harnesses the power of advanced technology to aid in their mission to recover lost Bitcoin. From password cracking software to data recovery tools, their arsenal is equipped with the latest inventions in the tech world. With these tools at their disposal, they can perform digital feats that would make Harry Potter jealous. James Miller Recovery doesn’t shy away from seeking reinforcements when battling the forces that hold your Bitcoin hostage. They harness the collective power of digital experts to increase the chances of a successful recovery. It’s like assembling a team of Avengers for the digital realm, working together to bring justice to the world of cryptocurrency. In their quest to stay ahead of the game, contact James Miller Recovery via Website:: www:jamesmillerrecovery.solutions. Now to embraces artificial intelligence and machine learning. These technological marvels enable them to sift through massive amounts of data rapidly and identify patterns that might lead to the recovery of lost Bitcoin. It’s like having a team of digital bloodhounds trained specifically to sniff out your missing crypto assets. I was a victim of a cunning phishing attack that tricked me into revealing my private key. As my Bitcoin balance dwindled before my eyes, I turned to a trusted Bitcoin recovery service to undo the damage and that trusted team is James Miller Recovery. To prevent your Bitcoin from becoming a digital casualty, follow some simple best practices. Keep your private keys offline and secure them with multiple layers of protection. Contact James Miller Recovery via: jamesmillerrecovery@)mail.com..
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A well-known company called Coder Cyber Services specializes in the effective recovery of bitcoins. Expert help in recovering lost, stolen, or inaccessible digital assets is becoming more and more necessary as the value and appeal of cryptocurrencies like Bitcoin rise. Coder Cyber Services is not your ordinary firm. No, they don’t specialize in pulling rabbits out of hats or casting spells (although that would be pretty cool). Instead, they are experts in the intricate world of bitcoin recovery. With their expertise and innovative methods, they have become a trusted name in the industry. Reliable bitcoin recovery services are becoming increasingly necessary as the demand for cryptocurrencies like Bitcoin continues to soar. It might be a nightmare to lose or have your valuable digital currency stolen, but companies like Coder Cyber Services can help. For both individuals and companies, their capacity to recover misplaced or pilfered bitcoins has proven to be immensely beneficial. Behind the success of Coder Cyber Services is a team of highly skilled recovery specialists. These individuals have dedicated their careers to mastering the art of bitcoin recovery and are always one step ahead of the bad guys. With their expertise and experience, they have helped countless individuals and businesses reclaim what is rightfully theirs. Therefore, do not panic if you find yourself in the terrible circumstance of misplacing your bitcoins! Coder Cyber Services is prepared to restore your digital assets to life by waving their magic wand (figuratively speaking). Don’t hesitate to reach out to Coder Cyber Services through their website https://codercyberservices.info/ or rather give them a call +1 (403) 407-3407.
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Understanding the Challenges of Lost or Stolen Bitcoin:
Losing access to your Bitcoin wallet or falling victim to theft can be devastating. Traditional financial institutions do not provide the same level of assistance as they would in case of stolen fiat currency. The decentralized nature of Bitcoin means that transactions are irreversible, making it even more challenging to recover lost funds. Recognizing these challenges, iBolt Cyber Hacker offers their expertise to individuals facing such unfortunate circumstances.
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