5 Tips To Save On A Mortgage
Tip One - Choose a mortgage deal that's a good fit
Choosing the right mortgage means taking the time to understand your personal circumstances and needs. Different people have different mortgage needs. It’s also wise to compare mortgage deals from different lenders.
Tip Two - Take advantage of government incentives
The government realised that so many aspiring homeowners couldn’t afford a home because they’re also required to pay stamp duty land tax if the purchase price exceeds a particular amount. You’ll be happy to know that for houses worth £500,000 or below, you aren’t required to pay stamp duty tax on the first £300,000.
Saving a sufficient deposit remains the largest hurdle for many prospective home buyers. The government has stepped in with the Mortgage Guarantee Scheme encouraging the return of the 95% LTV mortgages.
If you find saving a sufficient deposit for a mortgage challenging a Lifetime ISA could be a huge help. You’re only required to save £4,000 a year and the government will add a 25% bonus, up to a maximum of £1,000 per year.
The Right to Buy Scheme helps you buy council homes at a maximum discount of £84,000 across England but £112,800 in London Boroughs.
The Right to Acquire Scheme helps you buy housing association homes at a discount between £9,000 and £16,000.
The Scheme allows you to buy a share of the property and pay rent on the rest. You can buy anywhere between 10% and 75% of the home’s value.
Targeting First Homes under the Scheme could be the easiest, cheapest and quickest way for you to get on the property ladder. First Homes fall under UK’s affordable housing planning, provided to eligible people whose needs aren’t met by the market.
Tip Three - Sub Let a Room
If you have a spare room not in use why not sub let to help save your hard-earned money. First check your agreement allows you. If you use Rent a Room Scheme, the income you get from sub-letting a room is tax-free up to £7,500 a year.
Tip Four - Look out for remortgaging opportunities
Remortgaging can provide an opportunity to pay off your existing mortgage and take out a new mortgage at better terms. Seek professional assistance to determine whether you’re actually moving to a better deal and that you’re in an excellent financial position to remortgage.
Tip Five - Overpay on your mortgage if you can
This could be an opportunity to save a lot of money. For example, if you take out a 25 year loan of £190,000 at 3.5% interest, you’ll pay £952 monthly and end up paying £285,453 over the full term. However, if you pay an additional £100 per month, you’ll end up paying £270,435 over the full term saving you £15,018 in interest alone and pay off the debt earlier than expected.