Did you know that regularly reviewing your mortgage could save you a fortune?

Mar 13, 2017 | Tony Byrne's View

Did you know that regularly reviewing your mortgage could save you a fortune?

My fiancée remortgaged her property last year after her two year fixed rate period had ended.  She is Chinese so was not fully au fait with the UK mortgage market.  She was sold a 30 year mortgage which kept her monthly repayments at an affordable level of £800 a month.  However this meant she would be paying the mortgage for at least an extra 5 years which would amount to a significant amount of extra repayments over the 30 year term.  She has owned her property for about 5 years so far.

I suggested she remortgage at a lower interest rate on a fixed rate for 5 years and reduce the remaining term from 28 years to 20 years.  As a result her monthly repayments increased by £100 to £900 pm which was affordable because she had had two years of pay increases in the meantime.  The overall saving for her over the next 20 years will be £72,000 (£96,000-£24,000).   

Now that’s not a large fortune but it’s certainly a small fortune!

I am currently arranging a remortgage of the 2 commercial properties in my Self Invested Personal Pension.  My current pension mortgage repayments are £2,900 a month and there is a remaining term of just 2 years.  I have been making substantial overpayments on my pension’s mortgage for years.  

Because I need to borrow some more money for further property investment  my mortgage broker has sourced me a mortgage that will cost just £700 a month admittedly on an interest only basis and over a longer term.  However this will release about £50K in equity for further investment and reduce my mortgage repayments by £2200 a month.  That’s a whopping decrease of 76% in monthly repayments!

Potentially the £50K in released equity could make me a small fortune in the coming years if it performs as well as I expect it to perform.  Only time will tell.  Nonetheless it is another example of how imaginative financing of your property can make a real difference to your life.

Now we do not advise on mortgages, we are investments and pensions specialists, but we do have some really good mortgage broker contacts.  So if you want to know more about how to knock years off of your mortgage, reduce the monthly repayments, help your children or grandchildren onto the property ladder and/or release equity from your property we “know a man who can.”  Do contact us should you require further advice.

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