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Cut your mortgage term by several years
Over the past 10 years mortgages have become available which are capable of being matched to an individuals life style .You normally pay a small premium interest rate for the features of these flexible mortgages but provided your circumstances fit the product they can work out considerably cheaper in the long term. By far the most common because it’s the simplest is the offset mortgage which enables you to use your savings to help pay off the mortgage. You can always get at your savings but whilst in your offset account they are working harder for you.
You can think of this one of two ways. If you have a mortgage of £150,000 and savings of £30,000 you only pay interest on £120,000. Alternatively you can think of it as getting a rate on your savings after tax of the mortgage rate – far better for higher rate tax payers than they would get on deposit.
Offsets are often over marketed and really are only for you if you have reasonably large savings and if you are a higher rate tax payer. But if you are they enable you to pay off your mortgage far faster than normal. They are particularly beneficial for self employed borrowers who normally save their tax on deposit until it’s due for payment.
The Flexible mortgage
Flexible mortgages often have the features of offsets but also add in a number of other features, including as a minimum the ability to take a payment holiday, overpay or underpay and borrow back your overpayments. Again it’s only worth taking these loans if you are going to use these facilities which particularly suit people with uneven income and outgoings.
The Current account mortgage
Finally there’s the current account mortgage – a pretty dedicated animal that links your current account with your mortgage. These are only suitable for the most financially disciplined and simply a bad idea if you are not.
With all these variations you need high quality advice from ITV Local Mortgages to ensure you get the right product for you.
We charge a simple one off fixed fee of just £195 for remortgages, £375 for purchases, £750 for buy to let and £995 for credit impaired-mortgages.
Alternatively, for purchase and remortgage business for your own residence you may pay a fee of 1% of the mortgage (2% for credit impaired mortgages) and any commission received from the lender will be returned to you after completion. The minimum fee is £1,000 (£2,000 for credit impaired mortgages). On a mortgage of £180,000 the fee payable on completion would be £1,800 (£3,600 for credit impaired mortgages).
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.