Parents News Forum
Mortgage Advice
Quote from Penny McCarthy on November 12, 2024, 10:20 amWhen it’s time to renew or set up a mortgage, many people tend to stick with their current bank out of convenience. However, recent research suggests that staying loyal to your bank could come at a price.
A small difference in interest rates can add up to thousands of pounds over the life of a mortgage, which could leave you paying more than necessary.
Jonathan Bone, Head of Mortgages at online mortgage broker Better.co.uk, explains how investing a bit of extra time and research into your mortgage lender could lead to massive long-term savings.
The hidden cost of loyalty
You might assume that banks would offer their best mortgage rates to loyal customers, right? In reality, though, many banks reserve their most competitive rates to attract new customers rather than reward existing ones.
For some homeowners, a small difference—like a 0.1% reduction in the interest rate—might not seem enough to justify the hassle of switching lenders. But even a seemingly minor rate change can mean paying hundreds of pounds more each year. Over a 25-to 30-year mortgage, these extra costs can really add up.
To put it into perspective, 89% of homeowners would be better off switching from their lender to Better.co.uk’s recommended rates, based on recent data.
On average, Better.co.uk could save customers £116 per month or £4,518 over their fixed term—savings that could be put towards paying down the mortgage faster, investing, or improving financial security.
Why it pays to shop around
If you’re used to banking in one place, it’s easy to feel they’re offering the best deal. However, the mortgage market is highly competitive, and rates and perks vary widely. Shopping around can help you find the lowest rate and potentially get benefits like cashback, lower fees, or flexible repayment options.
However, keep in mind that some banks offer tempting perks, like cashback, alongside higher interest rates that ultimately cost more. It’s essential to weigh each perk against potential savings to make sure you’re getting genuine value.
Key factors to compare when shopping for a mortgage
When looking for a mortgage, consider these key factors:
Interest rate: Even a slight difference in rates can make a significant impact over time, so compare annual interest rates, not just monthly payments.
Fees and charges: Arrangement fees, valuation fees, and early repayment penalties can add up. Some lenders waive fees to attract new customers, so this is certainly worth looking into before making a commitment.
Flexibility: If you want the option to make extra payments or adjust your loan term in the future, make sure your mortgage terms support this without hefty penalties.
Don’t let convenience cost you
Switching lenders may feel time-consuming, but the financial benefits can make it worthwhile. Our mortgage comparison tool lets you view lender rates side by side, so you can quickly see where the best deals are.
When it’s time to renew, take the time to explore your options to avoid unnecessary expenses, as choosing the right mortgage might be one of the smartest financial decisions you make.
When it’s time to renew or set up a mortgage, many people tend to stick with their current bank out of convenience. However, recent research suggests that staying loyal to your bank could come at a price.
A small difference in interest rates can add up to thousands of pounds over the life of a mortgage, which could leave you paying more than necessary.
Jonathan Bone, Head of Mortgages at online mortgage broker Better.co.uk, explains how investing a bit of extra time and research into your mortgage lender could lead to massive long-term savings.
The hidden cost of loyalty
You might assume that banks would offer their best mortgage rates to loyal customers, right? In reality, though, many banks reserve their most competitive rates to attract new customers rather than reward existing ones.
For some homeowners, a small difference—like a 0.1% reduction in the interest rate—might not seem enough to justify the hassle of switching lenders. But even a seemingly minor rate change can mean paying hundreds of pounds more each year. Over a 25-to 30-year mortgage, these extra costs can really add up.
To put it into perspective, 89% of homeowners would be better off switching from their lender to Better.co.uk’s recommended rates, based on recent data.
On average, Better.co.uk could save customers £116 per month or £4,518 over their fixed term—savings that could be put towards paying down the mortgage faster, investing, or improving financial security.
Why it pays to shop around
If you’re used to banking in one place, it’s easy to feel they’re offering the best deal. However, the mortgage market is highly competitive, and rates and perks vary widely. Shopping around can help you find the lowest rate and potentially get benefits like cashback, lower fees, or flexible repayment options.
However, keep in mind that some banks offer tempting perks, like cashback, alongside higher interest rates that ultimately cost more. It’s essential to weigh each perk against potential savings to make sure you’re getting genuine value.
Key factors to compare when shopping for a mortgage
When looking for a mortgage, consider these key factors:
Interest rate: Even a slight difference in rates can make a significant impact over time, so compare annual interest rates, not just monthly payments.
Fees and charges: Arrangement fees, valuation fees, and early repayment penalties can add up. Some lenders waive fees to attract new customers, so this is certainly worth looking into before making a commitment.
Flexibility: If you want the option to make extra payments or adjust your loan term in the future, make sure your mortgage terms support this without hefty penalties.
Don’t let convenience cost you
Switching lenders may feel time-consuming, but the financial benefits can make it worthwhile. Our mortgage comparison tool lets you view lender rates side by side, so you can quickly see where the best deals are.
When it’s time to renew, take the time to explore your options to avoid unnecessary expenses, as choosing the right mortgage might be one of the smartest financial decisions you make.