|
Moving your mortgage to get a cheaper deal can save you thousands of pounds a year. But if it were that simple, we'd all be doing it. However enticing the cheap rates may be, the process can be extremely frustrating.
Good online mortgage sites to help narrow your search include Charcol and London & Country.
Face to face advice on the high street is also free - but your bank or building society will plug its own deals, and often give the hard sell on insurance. Resist offers of 'mortgage payment protection insurance' which pay the mortgage if you fall sick or lose your job. It's overpriced and the sales practices of lenders are under investigation.
As a rule, 'special' deals lasting several years have higher headline interest rates but lower upfront charges. A short one-or-two year deal, at a fixed rate, with rock-
|
 |
|
 |
| |
bottom interest payments, will often carry a lender's fee. One loan last week offered a two-year fixed rate of 3.99 per cent, but a fee of £719.
In the past borrowers had to pay thousands if they moved their loans once the 'special offer' period ended. Bad publicity forced a change, so look for the phrase "no extended early repayment penalties".
It's good to make 'overpayments' when you can afford it. This means paying extra cash monthly, or via a lump sum. Some mortgages don't let you do this, so check first.
Bitter re-mortgaging experience forces me to suggest one last tip: if you are thinking of switching lenders, even in the distant future, start saving your mortgage statements, payslips, bills and proofs of address going back several years. More 'traditional' lenders (usually smaller building societies) will want to see all of this stuff. 
FIRST POSTED JUNE 1, 2006
 Last week: investing for beginners |
skip to nav
