Finance

Time versus money: Why it pays to find the right mortgage

Time versus money: Why it pays to find the right mortgage

Taking out a mortgage is a huge moment for anyone. In terms of financial decisions, you’ll make in your life, taking a step onto the property ladder – whether it’s for the first time, you’re remortgaging, or simply moving to a new place – being able to effectively invest your monthly living costs into a property is hugely liberating. 

That said, a mortgage is also a major commitment. Finding a rate that matches your other financial obligations and won’t take too large a chunk out of your monthly paycheck is important. With any long-term commitment, you equally have to be mindful of the fact that your life, and financial outlook, can change over what can amount to over 20 years of repayments in some cases. As such, we’re discussing how to select a mortgage deal that is supportive of your needs and won’t become an unmanageable burden in the long term.

Starting out

Firstly, you’re not alone when you start applying for a mortgage. Naturally, you need to be approved to get one, but there’s also a lot you can do to find a competitive rate that suits you well. Looking at your monthly incidentals and fixed costs, you’ll want to find a rate that is more or less somewhere around the amount you pay for rent if you’re currently in rented property. 

Depending on where you live, and what you earn, a mortgage can sometimes be somewhat high. Although you have to remember that the money you’re paying is being invested into the property rather than being ‘spent.’ Many people will take out higher rates with shorter terms too, to pay off the property quicker. Because of the wide range of deals available, it’s highly recommended that you seek out a mortgage broker or comparison platform where the breakdowns of what you can get are a lot more intuitive and easier to work with. With the potential to saving notable amounts of money with the right deal, it’s considerate to weigh up your many options.

A note on remortgaging

Remortgaging is a renegotiation process of moving to a new lender whilst remaining where you currently live. It can be a little intimidating to someone new to the concept. However, remortgaging can carry many great benefits to a current homeowner. A good deal means either saving some cash or taking out a larger rate if your circumstances have changed and you want to pay off your mortgage earlier. That extra money can go a long way too.

You can invest your additional capital right back into your property with home improvements that will, in turn, increase your house’s value. Alternatively, you can actually pay off an existing mortgage and use your home’s underlying value as security. If you’re carrying some debt, remortgaging is a nice way to merge what you owe and structure your finances. Finally, you have the ability to free up the equity you’ll have accumulated over your previous repayments. This is effectively safeguarding those savings by acquiring a lower interest rate.

The reality is that once you’ve taken out a mortgage, it’s simply a question of time. Some might not allow for early repayments, others may be on only a partial ownership basis, but paying off the mortgage will fade into another fixed cost until it’s paid off entirely. Like a lot of financial products in the last ten years, the increasingly customer-centric direction we’re going on speaks to convenience and speed above all else. Mortgages are no different.

With a little planning ahead and some due diligence on the deal you’re getting, you can find the rates that work to your financial world, rather than being beholden to the lender. As empowering as finally owning your own home can be, the route to get there doesn’t have to be a rough one either.

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