Thursday, 14 April 2016

Lowest Mortgage Rates

ACT NOW for rock-bottom mortgage rates

Mortgage rates are rock-bottom right now, especially for first timers with smaller deposits or existing homeowners with limited equity in their home.

Two years ago if you borrowed 90% of the property value (a 10% deposit) the cheapest 2yr fix was 3.48% - now it's 2.04%, which on a £200,000 property is a saving of £5,050, even including fees. And for 95% LTV (5% deposit), rates are down too, from 4.79% to 3.29%. So here are my 13 top mortgage tips...
Every homeowner - check if you can save £1,000s on your mortgage. Check if you can remortgage (where you get a new deal without moving home) to substantially cut costs. This can mean big savings; as Caroline posted on my Facebook page: "Got a new deal saving £128/mth, £3,000 over 2 years. Thank you, Martin."

To work it out there's a range of info you'll need, crucially...

a. Your current rate, monthly repayment & outstanding amount: If you're stuck on your lender's standard variable rate (SVR), it's especially likely you're overpaying, as these typically range from 4% to 5%. So big savings are likely.
b. Type: Is it a fix, tracker, discount or SVR?
c. Deal deadline: If it's a short-term deal (eg, 2yr fix), when it ends.
d. Term: How long it is, eg, 25yrs, and when it must be fully repaid by.
e. Penalties: Are there early repayment or exit penalties? If so, these often kibosh your ability to save.

Crucially, find your CURRENT loan-to-value (LTV) - the proportion of the value you're borrowing: eg, £80k on a £100k property is 80% LTV. For each 5% lower your LTV is, until 60%, the cheaper the deal. So if your home has increased in value since you got your mortgage, you may gain. See LTV help for full info.

First-time buyers - save in a Help to Buy ISA for a free £3,000. For anyone 16+ who's never owned a home, this is the place to save for a mortgage deposit. That's because as well as interest you get 25% added on top, up to a free £3,000. And don't think "I don't have time" - even if you're buying within 3mths you can gain. Full FAQs in Top 4% Help to Buy ISAs.

MortgagesFREE 50-page MSE First-Time Buyers' and Remortgaging Booklets. A mortgage is most people's biggest expenditure, and even if you've done it before, that doesn't mean it's the same this time around. My fully updated guides take you through it step-by-step.

- First-Timers' Booklet 2016: Download instant PDF | Order printed
- Remortgage Booklet 2016: Download instant PDF | Order printed

Many of you give us great feedback, as Haruka tweeted: "Just applied for 2yr 1.69% fix. Thanx for the Remortgage Guide. Really useful."

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