What are your mortgage resolutions?

What are your mortgage resolutions?
Many people put sorting out their finances at the top of their list of New Year financial resolutions, and reviewing your mortgage can be a great place to start.

Your mortgage is likely to be your biggest monthly outgoing, so making sure you’re on the best possible deal could potentially save you hundreds of pounds a year.

Here’s our rundown of some of the mortgage resolutions that could help you save money in 2018.

Review your mortgage

If you own a property, check your current mortgage rate and see if you can cut your monthly bills by remortgaging to a better deal.

According to L&C’s own research, more than a third (36%) of homeowners are paying their lender’s Standard Variable Rate (SVR), even though these rates are usually much higher than other mortgage rates.

There are loads of competitive mortgage deals available, so if you’re not sure which is the right one for you, seek expert help.

Before remortgaging, make sure your current deal doesn’t have any early repayment charges.

Check mortgage costs if you’re a landlord

If you’re a landlord, make sure you review your buy-to-let mortgages too. Keeping outgoings to a minimum is especially important given changes to mortgage interest tax relief.

This relief is gradually being reduced so that by 2020 it will be 20% for all tax-paying landlords, which means many higher and additional rate taxpayers will face higher tax bills.

Prepare for higher rates

November’s base rate rise was an important reminder that interest rates aren’t going to remain at rock-bottom levels forever. Although the Bank of England has said that any increases in rates will be both “limited” and “gradual” it still makes sense to ensure you’re ready for potentially higher mortgage costs if you’re on a variable rate deal.

If you’re worried about rising rates, you might want to think about locking into a fixed rate mortgage so that you’ll have peace of mind your monthly costs won’t change if interest rates do go up.

Make overpayments if you can

Overpaying your mortgage by even a small amount each month can make a big difference to the amount of interest you’ll pay back overall and could also reduce your loan term.

If you do have any spare cash available each month, you may therefore want to arrange with your lender to put it towards your mortgage. Check for any restrictions on the amount you can overpay first, but many lenders allow you to repay up to 10% of your mortgage each year without penalty.

Boost your deposit

If you’re a first-time buyer hoping to get onto the property ladder in 2018, make building up as big a deposit as you can one of your resolutions. Having a bigger deposit to put down will give you access to a much wider choice of mortgages at better rates.

The good news is that the first-time buyer stamp duty exemption on property purchases up to £300,000 announced in the Budget last November could save you up to £5,000. Rather than spending this cash on something else, you could use it to increase your deposit.





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