Renegotiating your mortgage: a money-saving option
Interest rates have pushed up the cost of access to credit, including mortgages. Is there any way for borrowers to save money? Renegotiating mortgages could open up a window of opportunity.
In an article in the Guardian on 4 January, Richard Partington wrote that homeowners are likely to see their mortgage costs rise by a total of £19 billion. This is because fixed rate deals are coming to an end. In other words, many borrowers will have to pay more each month. It is reasonable to assume that many of them are, and will be, looking for alternatives to save money.
One option could be to renegotiate mortgages and look for better deals. For example, according to an article in the Guardian by Rupert Jones, April Mortgages offers a special mortgage refinancing: it offers Dutch-style long-term fixed-rate mortgages, meaning that the interest rate falls as the loan is paid off.
Also on BBC News, in an article by Marc Ashdown (who also reports the opinion of some experts in the field), you can read about some of the possible strategies to save money on mortgages. Some of these strategies are forms of mortgage renegotiation. For example, there is the possibility of paying only the interest on the mortgage for a period of time, thereby postponing the repayment of the loan. Or there is the possibility of extending the term of the mortgage, with the obvious advantage of reducing the amount of each instalment, at the cost of having to pay longer and a higher total amount of interest.
Also on the BBC, Lora Jones talks about mortgage remortgage offers for those who have taken out fixed rate mortgages. Jones notes that many of the offers from lenders are valid for around six months. Therefore, Jones says, "it's a good idea to start looking now".