Martin Lewis gives advice on paying mortgage with savings
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Mortgage repayments have a big impact on your budget. For most Brits buying a house will be the biggest financial commitment they’ll make in their lifetime. Finding ways to reduce your monthly costs and pay less in the long term is essential. Express.co.uk has rounded up five ways Britons could save thousands.
Separate your home insurance and your mortgage
Often home insurance is joined together with your mortgage.
Such deals are normally more expensive than paying them separately, plus you can’t shop around for better deals on home insurance whilst the two are joined together.
Lenders typically require building insurance as a condition of your mortgage but you don’t have to take out insurance with them.
Price comparison sites can save you hundreds of pounds so it’s worth separating your insurance and mortgage if you can get a better deal elsewhere.
Mortgage calculator: Paying off a mortgage is a major expense for many Brits (Image: GETTY)
Mortgage calculator: Make the most of historically low-interest rates (Image: GETTY)
Make the most of historically low-interest rates – pay off your mortgage early
Because of historically low interest rates, many Brits have seen their mortgage payments reduce over the last few years.
If you have been lucky enough to see your payments reduce, rather than letting the extra money get consumed in your day to day spending, try to make extra payments towards your mortgage.
Any extra payments you make will help to reduce the capital you owe.
Mortgage calculator: Price comparison sites can save you hundreds of pounds (Image: GETTY)
If you overpay on one month this means for the following month the interest you’re charged is actually less.
This is because your capital debt has been reduced.
You may not be able to see a huge difference initially but over time this could save you thousands.
Keep an eye on your budget
Keeping a close eye on your monthly budget could be key to paying off your mortgage faster.
Mortgage calculator: Often home insurance is joined together with your mortgage (Image: GETTY)
Everyday spending can easily add up, review your spending often and make sure you lookout for the best deals on monthly bills such as your utility bills.
Be sure to cancel any subscriptions you aren’t making the most of such as old Spotify accounts, gym membership or online subscriptions.
Reviewing your budget could mean you have more money at the end of the month, this extra cash can be put towards paying off your mortgage early.
Think about moving from the standard variable lenders rate
Many Britons start out on a fixed-rate mortgage deal, but when this comes to an end you’ll be swapped onto your lender’s standard variable rate (SVR).
A standard variable rate mortgage has an interest rate set only by your lender, it’s usually higher than some other available deals.
This can increase the overall cost of your repayments significantly
It’s worth shopping around to see if you can get a more competitive rate by switching to a different provider or by agreeing to a better rate with your lender.