Top Tips for Cutting the Cost of Your Mortgage During Current Pandemic

July 29, 2021 by in category Mortgage Advice, mortgage in London tagged as , , with 0 and 0

The current pandemic has caused significant losses globally in terms of human lives and finances, while its attacks are still going on. The best trait of humanity is that it eventually comes out on top, no matter how adverse the circumstances are. Thus, Covid-19 will also be surmounted at last.

During this trying period, we all have to manage our ongoing affairs somehow or else. Like other businesses, Covid-19 has affected UK mortgage lenders as well as their customers. Thus, mortgage customers seem to desperately find out how to reduce mortgage payments UK during the current pandemic.

The mortgage lenders are also offering support measures to their clients who face problems in paying their mortgages due to the pandemic. They are mainly offering mortgage payment holiday, also known as mortgage payment deferral.

What Is Mortgage Payment Holiday?

In this case, you do not need to make monthly mortgage payments for a specific duration. But you still owe the money, and the interest also grows as stated in your contract.

Before the end of each payment holiday period, the lender contacts to evaluate their customers’ financial status and offer the possible options. The lender agrees on an arrangement with you for the repayment of the deferred payments.

Ways to Reduce Mortgage Payment

Repaying a mortgage can appear to be a scary task, especially during this pandemic. However, there are easy ways that can help you reduce mortgage payment when followed smartly.

Reconsider Current Mortgage Rate

At the end of the fixed-rate, instead of accepting the lender’s Standard Variable Rate (SVR), try and find out a new mortgage deal with a lower interest rate. The lenders set the interest rate using SVR, and it could be higher than you should pay. Thus, a new deal will make it more affordable for you.

Reconsider What You Pay For

Do your payments include life insurance and mortgage protection insurance, among other costs? If so, break down the costs and look for a deal covering these components.

Take a Break

As mentioned above, you can ask your lender to provide you with a mortgage payment holiday. This can earn you two or more months, depending on the type of mortgage.

Cost Sharing

Rent a room in your house to earn and add that rental income to your mortgage payments.

Increase Mortgage Duration

If it has been quite a while paying the mortgage, you can reconsider and increase mortgage duration. This way, the capital you owe spreads over a few more years, reducing the monthly amount to be paid back until the end of the mortgage term.

Switch to a Low-priced Lender

Find a lender who is offering you a cheaper deal than your current mortgage provider. Though it will cost you administration fees, it will surely save you a considerable amount of money. The above ways about how to reduce your mortgage in the UK always work well if you follow them with due diligence. Let us know in the comments which ones worked for you best so that other readers can also benefit from your experience.

London Mortgage Advice Ltd is authorized and regulated by the Financial Conduct Authority for residential mortgages and non investment insurance business.

Although London Mortgage Advice Ltd is regulated by FCA, commercial mortgages and most buy-to-let and offshore mortgages are not regulated by the FCA.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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