Your mortgage under attack – four ways to fight rising costs

According to Moneyfacts, an analyst, 33 five-year mortgage agreements are offered with no exit fees beyond a nominal administration fee. Coventry Building Society offers a five-year contract at 1.89 percent for people who remortgage with 25 percent equity, and early termination of the mortgage only incurs a fee of £ 125.

Several lenders are offering 10-year fixes with an early departure option after five years, said David Hollingworth of broker L&C, who said that fixing longer was “a given for now.” The cheapest solution over 10 years is 2.24 pc with TSB for those who remortgage with 40 pc of equity; prepayment charges only apply for the first five years.

Offset your savings

“Offset” mortgages allow borrowers to tie their savings accounts (which must be held with the lender) to their home loan and pay interest only on the difference.

Rates tend to be a bit higher than on conventional mortgages, but for those with large deposits, they can be attractive and allow easy access to cash in an emergency. As the gap between savings rates and mortgage rates widens, their appeal increases. Coventry Building Society has a two-year fix to 1.49pc, plus a fee of £ 999, for a 25pc deposit.

Get a mortgage offer, even if you don’t use it

Mortgage offers last for six months, providing protection against rising rates by May. You don’t have to accept an offer and you can act quickly if prices go up. Lender turnaround times are longer than usual as they are still grappling with the pandemic real estate boom, which has seen a record number of transactions in the past 12 months, so it is best to apply as soon as possible .

Add value to your home

As a general rule, the more equity you have in a property, the lower the rate you will be offered. Converting a loft or doing other value-added renovations should secure a better mortgage, offsetting the cost of the work itself.

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