Homeowners could be paying around 20%* more than they need to on their monthly mortgage repayments warns Towry Law Mortgages.
Simon Holdsworth, Managing Director of Towry Law Mortgages commented: “The word ‘remortgage’ used to be associated with needing to raise cash to solve other problems, usually as a last port of call. This reputation created a remortgage inertia that has meant many borrowers are literally throwing thousands of pounds down the drain each year by not reviewing their arrangements regularly. If our mortgage debt was an investment balance would we simply choose one investment vehicle and never review our decision? ”
Following internal research into cost savings achieved by homeowners who have recently remortgaged, it was found that an average saving on repayments was around 20%. This means an average loan of £210,000 saw homeowners reduce their payments by £185 per month or a staggering £2,220 per year*.
Simon commented further “Whether you are just re-mortgaging to a cheaper deal or consolidating debts, the cost savings can mean a big difference to your lifestyle. Many people out there are feeling the pinch at the moment, reviewing the cost of the family holiday or perhaps delaying changing the car, I am certain knocking 20% off a mortgage payment could go a long way to easing the pressure.”
Simon’s top tips for anyone looking to remortgage include:
· Dig out details about your current mortgage. Refresh your mind about some of your basic mortgage details e.g what type of deal you currently have and how long you have left to pay.
· Request a redemption statement from your current lender. This will list the exact cost of repaying your mortgage including any cancellation costs (known as redemption penalties).
· Don’t be put off if you are currently tied into a fixed or discount rate. Sometimes the cost savings made over the longer term can outweigh any costs involved in switching your mortgage initially.
· Sit back and let your broker do all the work for you. A big hurdle which prevents homeowners from remortgaging is time. Reviewing the 4,000 or so latest mortgage deals around can take a significant amount of time and effort.
