How much does your mortgage cost each month?
Many people will be able to tell you to the exact penny. After all, it’s one of the biggest outgoings that your household has to pay. It’s also the one expense that you can’t cut down on, or tighten your belt.
Or is it?
Whilst most know how much their mortgage costs, research from Ipsos MORI suggests that almost half (44%) of homeowners were unsure how their mortgage rate compared to the best rates on the market (Source: Ipsos MORI).
Lack of awareness among young people
In a survey of 2,000 UK homeowners, Ipsos Mori found that:
- 77% of 55-75-year-olds were aware of the best mortgage rates
- 62% of 34-44-year-olds were aware of the best mortgage rates
- 42% of 16-24-year-olds were aware of the best mortgage rates
The decrease in awareness among the young is particularly concerning, as finding the best interest rate is important for first-time buyers who need every bit of help they can get.
The survey also revealed a higher lack of awareness among the unemployed, with:
- 68% of employed people being aware of the best mortgage rates
- 56% of unemployed people being aware of the best mortgage rates
Losing focus
Mortgages are important, there’s no doubt about that, they are the gateway to allowing us to buy the home of our dreams. Unfortunately, they aren’t the most exciting of things, and over the past 10 years, interest rates have hardly moved, making it easy to lose track of them. Whether it’s a first mortgage or a new one to move home, it’s likely that you will have a better understanding when you are actively researching and looking for the best deal. However, as time goes by, it’s easy to lose focus.
This is a problem, as the Bank of England (BoE) pushed up interest rates by 0.25% last year. Each lender reacted in a slightly different way, and as we move into 2018 expecting further changes, it may become harder to stay on top of the interest rate you are paying. This leads to the potential of paying more than you need to.
How do I know if my mortgage rate is competitive?
Shop around!
Once you know your current mortgage rate (which can be found by calling your lender) you can start looking at comparable products on the market.
There are a number of ways to do this. The first involves researching it yourself, whether that be by:
- Phone
- Online
- In branch
However, this does take time, and you will only be able to access the lenders that are available on your local high street or online.
To access the whole of the market, and potentially find a better rate, you could ask your favourite independent mortgage broker to do the hard work for you (which, without making assumptions, we’d be more than happy to help you with).
The value of a mortgage broker
There are plenty of things to consider when choosing the right mortgage, and whilst it is important to get a competitive rate, it isn’t just as simple as going for the cheapest product you can find. For example, now may be the time to consider a fixed rate, which provides you with the security of knowing exactly what you will be paying for a set number of years.
An independent mortgage broker is on your side, not the lender’s. This ensures that you are shown products that are right for your own personal circumstances, rather than an off-the-shelf option that might not suit you in the long run.
Whilst you may only delve into the world of mortgages when necessary, independent mortgage advisers deal with lenders and borrowers on a day-to-day basis, making them very useful people to know when the time comes to find the right mortgage.
We can help
With many years of experience behind us, we can assist with mortgages for:
- First-time buyers
- People moving home
- Buy to Let investors
- Existing homeowners looking for a remortgage
For more information on mortgage rates, or to find out how competitive yours in, contact us on 0800 612 8099 or request a call back by clicking here.