Three mortgage resolutions you should make in 2017
A Time magazine survey in 2015 found that a pledge to 'enjoy life to the fullest' was the most popular New Year's Resolution for 2016. The research also found that financial resolutions featured strongly, with a third of respondents wanting to 'save more and spend less' while 27% pledged to 'pay down debt' as one of their resolutions.
The New Year is a great time to formulate plans and priorities for 2017. Here are three mortgage resolutions that you should consider making this year.
1. Consider a remortgage
Your mortgage is likely to be one of your biggest outgoings and there are savings to be made by switching to another lender.
As 2017 begins, mortgage rates remain at historically low levels with some record-breaking deals available. By switching onto a fixed or discounted rate you could save thousands of pounds - and many lenders will also contribute towards the cost of remortgaging.
Now could be the time to take action as many experts believe that 2017 will see the end of rock-bottom interest rates.
Finance expert Martin Lewis says: "I think there’s a plausible risk that 2017 will be the year that [low rates] changes. This is less about the UK base rate and more about the City’s prediction of long term interest rates, which impacts the rate at which new fixed mortgages are set. They’re already starting to rise, especially for longer fixes."
2. Shop around
If you are coming to the end of your fixed or discounted rate, your current lender may approach you with a range of deals to encourage you to remain a customer.
However, while these deals may seem attractive, you should always shop around to find the best deal. Indeed the process of 'loyalty deals' is set to be subject to a new review by the financial regulator. Lenders often reserve their best rates for new customers and so it can pay to switch rather than remain with your existing bank or building society.
Use an online comparison service or a mortgage broker to help you find the product that's right for you.
3. Make overpayments
Paying extra to your mortgage can help you to reduce your total interest costs. It can also help you to repay your mortgage more quickly.
Even if you are on a fixed or discounted rate, your lender will probably allow you to make overpayments on your home loan. Most lenders allow overpayments of up to 10% of your outstanding balance every year, and the minimum lump sum repayment is typically £500 or £1,000.
If you have a flexible or offset mortgage then even small overpayments can make a huge difference to your overall interest payments. If you have a traditional mortgage then you could consider saving a small amount every month into a savings account and then making lump sum repayments on a regular basis.