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Mrs Mean Money Show
Ep - 47 Cut your mortgage payments
Season 1, Ep. 47
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The Bank of England has raised interest rates by 0.5% causing panic among mortgage payers.
It comes as more than a million homebuyers will have to remortgage before the end of the year as their fixed rate mortgages expire. Many more have variable or tracker mortgages that have already increased a dozen times in the last 18 months and may be getting behind with payments.
Now is the time for all of these homeowners to talk to their lenders about what deals they can do to cut their payments. Lenders should help. They have agreed to allow borrowers to change their mortgage terms, say to interest-only, and then return to their original deal.
They also will wait for 12 months before taking reposssession proceedings. Borrowers are facing hundreds of pounds extra each month.
Wages are not keeping pace and budgets are also being stretched by energy costs, food prices, insurance premiums, council tax mobile and water bills.
The Banks know many borrowers need help so get first in the queue to see what can be offered. Extending the length of your mortgage term, moving to interest-only payments, asking for a mortgage holiday, adding other loans to your mortgage to cut total outgoings, or asking for an offset loan that reduces monthly payments are some of the options.
All lenders have committed to helping borrowers. They are making billions in profits on the difference between savers' rates and what they charge borrowers. It costs them less to get customers onto deals that cut their monthly payments than to deal with customers in arrears. It is in their interests to help anyone caught by the financial crisis. Debt agencies like Step Change, Turn2Us, Christians Against Poverty and Citizens Advice may also be able to help but first of all the lenders should have teams trained to help borrowers.
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