K. WOODWARD PERSONAL FINANCE
  • Start
  • Bio
  • WealthBlog
    • Books
    • Random Thoughts
    • Femail
    • GirlBanker
  • MyBooks
  • MoneySpot
  • Coach

Random Thoughts

Three Quick Tips On How To Get A Better Mortgage Renewal Rate

2/3/2013

0 Comments

 
Picture
Most people enter into a mortgage and as soon as the docs are signed and sealed they forget about it. Some don’t even remember when it matures or what the rate is. At the point of renewal their broker or mortgage lender shows them a price and they think, that looks alright, and roll over for another two or three years. You could be throwing away a lot of cash if this is you!

​​I used a mortgage broker the first time that I ever entered into a mortgage but I know the market so well now that I am my own broker. I prefer to shop for my own rates. Here are three simple things that could help you save a bucket load:

1. Set a reminder

As soon as you secure a mortgage, if there is a chance of you forgetting when it matures set a reminder on your phone or computer. An alert two to three months before the mortgage matures is ideal. If it doesn't mature for 10 years or more, set a reminder to shop around for a new mortgage deal in 2 or 3 years' time.

2. Call your lender to quote you a new rate two or three months before maturity, then shop around for better!

I was on a deal of 3.26% for two years at which point my mortgage reverted to the lender’s “standard variable rate” (SVR). Assuming an interest-only mortgage of £250,000, that’s about £15,990 over two years.

When I called to ask for a new fixed rate, I was quoted a 2-year fixed rate of 3.39% plus a fee of £500. Assuming an interest-only mortgage of £250,000, that’s about £16,630 before the fee. I thought this sounded okay and frankly I felt too lazy to shop around. I called my husband to confirm that I was going to confirm the rate and as he trusts me he said fine and “have you looked anywhere else for a better deal?” 

I hadn’t and although I didn’t feel like it I decided to do a quick, half-hearted search just to say I had. Within 15 minutes I saw a 2-year fixed rate deal at 3.09% with a fee of £1,000. Some quick maths told me that this deal would amount to a saving of just under £1,000 over a two year period.

3. Call your mortgage lender and bargain

The reason you call is because actually changing lenders is a bit of a hassle; a new lender will have to do a full due diligence on you whereas the existing lender already knows you, so if you can get the same deal where you are there will be far less work involved for you.

I called up my lender and told them the deal I had found. I was happy to pay the £1,000 fee for the saving of 0.30%. Being a reliable payer, my lender matched the rate of 3.09% and kept their fee at £500. Result!

Over the two year term that was a saving of about £1,500: enough to fund a brand spanking new iMac. I certainly wouldn’t sniff at that. 

Two months after I had secured this deal news broke that mortgage rates were going up across the UK economy…I was more than a little glad that I hadn’t waited until mortgage maturity to act!

Picture
0 Comments



Leave a Reply.

    RSS Feed

    By Heather
    ​Katsonga-Woodward

    I'm always thinking, debating, considering and revising my views - some of those deliberations will be shared right here.

    Categories

    All
    6 Figure+ Business Course
    Baby
    Baby Shower
    Celebrity Lives
    Culture
    Days Out & Holidays
    Diy
    Economic Development
    Education
    Entrepreneurship
    Fashion
    Films
    Food
    Getting To Wealthy
    Healthy Weight
    I Just...
    Life Is...
    Malawi
    Moral Hazard
    Parenting
    Personal Finance
    Politics
    Productivity
    Property
    Psychology
    Retirement
    Social Progress
    Spirituality
    Technology
    Weight Issues
    Women Issues

    Archives

    June 2017
    January 2017
    December 2016
    October 2016
    July 2016
    November 2015
    June 2015
    February 2015
    November 2014
    October 2014
    August 2014
    June 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    November 2010
    October 2007
    January 2007

Picture

Podcast Links

Wealth Blog 

  • Children
  • Financial Independence / FIRE
  • Pensions
  • Retirement
  • Saving
Buy me a coffeeBuy me a coffee
Picture

© 2007 - 2021, The Money Spot™ ~ Make Money, Change Lives!
Heather Katsonga-Woodward, a massive personal finance fanatic.
** All views expressed are my own and not those of my employer ** Please get professional advice before re-arranging your personal finances.
  • Start
  • Bio
  • WealthBlog
    • Books
    • Random Thoughts
    • Femail
    • GirlBanker
  • MyBooks
  • MoneySpot
  • Coach