Day 2 - Find a Cheaper Mortgage Rate

Discussion in 'How To Save Money Using 60 Minutes Everyday' started by Shobir, Oct 10, 2013.

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  1. Shobir

    Shobir Administrator Staff Member

    Admin Post
    After turning my personal finances around by spending 60 minutes every day on small projects I decided to share everything I did to get my self in a better position when it comes to money. I will be serializing all the 60 minute projects so other people can try them so they to can get their finances together. Most of these tasks will take no more than an hour and it's those tasks that we love to put off. So join me from Day 1 to Day 13 to see if you can get yourself in a more prosperous place financially.

    Day 2 - Find a Cheaper Mortgage Rate

    It's more than likely your mortgage debt will be the largest financial commitment you ever make. It's very easy to just set up the mortgage repayments and then go on with your daily routine and make payments every month without giving it a second thought. One mistake I made when I took out my mortgage was not to shop around for the cheapest rates, I was oblivious and stuck to the standard variable rate thinking it was the best thing to do.

    When I decided to try and save money on my mortgage the first step I took was to look at the contract. After the momentum of day 1 I was determined to save money and consequently I went through the contract in detail. I made a note of all the important telephone numbers, the rate I was actually on and what the outstanding mortgage balance was along with the amount I was paying in interest. Knowing all these small pieces of information will make you feel like you're more in control and you'll be motivated to try and do something about it.

    Once you're armed with all the important information you should check to see if you can switch to another cheaper rate or remortgage your property with another provider who's offering you a superior rate. For one reason or another most people hate change especially when it comes to their mortgage, I really don't know what it is but you need to break from this tradition to try and save as much money as you can.

    Visiting a price comparison site is all it takes. If you've got satisfactory credit and a steady form of income you can apply and be approved for most mortgage products. The process is very simple and takes no longer than 20 minutes, all you do is put your details in and you get a rate in principal. When I did this simple exercise I was able to switch from Northern Rock which was charging me 5.8% to Santander who charged me 3.19%! I saved a whopping 2.61% which was close to £300 per month.

    If you cant find any cheaper deals using price comparison sites then call your mortgage provider. Ask to speak to someone who's in charge of mortgage deals and explain that you want to be put on a cheaper rate. If you've made all your payments on time and have a good relationship with the bank you'll almost certainly be eligible for the superior products. If no cheaper rates are available then you should contact the mortgage provider once a month or however often the change their rates, this will give you a better chance on going onto a better product.

    If your credit score is holding you back when it comes to finding a better mortgage rate then your aim should be to repair any damage that has been done. Make some time to get your credit file and then look for ways to repair and rebuild your credit. Having a constantly increasing credit score will give you access to superior products that will save you thousands over the long run.

    So how much can you save? Well it all depends on how good your credit score is and how much you have left outstanding on your mortgage. If your loan to value is less than 70% you'll be eligible for great mortgage offers, if you're LTV is lower than 50% you'll be eligible for amazing deals so long as you've got satisfactory credit.

    We all love putting off anything that has to do with our mortgage but an hour spent to find the best rates available could save you thousands over the long run.
    Last edited by a moderator: Dec 30, 2015
    hamza and Alistair like this.
  2. Alistair

    Alistair Newbie

    I wonder how much the banks are making because customers are so lazy that they can't be bothered to call up to see if they can be put on a better rate. I was guilty of this too. For some reason people are afraid of change even if there's a possibility that it might be beneficial for them. The 9 to 5 grind also makes things like changing your mortgage a burden. Why has society made life so complicated.
    LiverpoolLife likes this.
  3. hamza

    hamza Newbie

    I was able to save £70 per month by going onto a cheaper deal. The call lasted 20 minutes and I signed and returned some papers when they were sent to me. The deal is fixed for 3 years which means I've saved £2520 for 20 minutes work. Even if you have bad credit it's worth calling up just to find out where you stand.
    Sadia likes this.
  4. Sadia

    Sadia Administrator

    Well done Hamza! I called my mortgage company up and they said that they don't have any promotions when it comes to mortgage rate at the moment. They did explain that rates and eligibility changes on a monthly basis. I'll definitely be calling them up on a monthly basis to find out if I'm eligible.

    The bank rep also gave me the following tips.

    1. Have a good relationship with bank (have a current account with the mortgage provider and have the money come out of there on a monthly basis.

    2. Always send an overpayment every month even if it's just 1%.

    3. Never miss a payment and give them details of the insurance you have in place for the property.

    4. Get your credit file and clean your credit as much as you can.

    Hope this helps.
    XenMoney likes this.
  5. XenMoney

    XenMoney Newbie

    Nice tips, I'm going to open a bank account with my mortgage provider to see if I have a better chance of going onto a better rate. Thanks.
  6. LiverpoolLife

    LiverpoolLife Newbie

    I hate banks and complain about anything they get wrong. I too was passive when it came to my mortgage, I eventually made the call and and went on to a tracker which saved me a handsome sum of money. Don't be scared of banks, they are nothing without us!
    Shobir likes this.
  7. Shobir

    Shobir Administrator Staff Member

    Admin Post
    Nice work. Banks make it awfully hard to contact them, if you want to do anything they ask the most awkward questions that can put anyone off. You just have to stay determined and get what you want to move to a bank who offers you better products.
    Alistair likes this.
  8. Alistair

    Alistair Newbie

    Loyalty never pays, I think I've changed my bank account 5 times, my mortgage account 3 times and I've lost count of how many times I've switched insurance and energy! At first I was hesitant but now I love giving the banks the run around and complaint at every minute thing.
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