Finding the cheapest mortgage deals
For customers who are searching for the cheapest mortgage deals, it is first important to carefully consider repayment options:
- Repayment mortgages allow customers to repay the interest on the mortgage along with a small portion of the borrowed capital until the entire amount has been completely paid off. This is usually considered the safest option for customers in the long term, as they are guaranteed to own the property outright at the end of the mortgage period
- Interest only mortgages allow customers to simply repay the interest on their mortgage every month, which can make payments cheaper. However in the long term, customers will be expected to make adequate provisions so the initial loan can be repaid
Overall, finding the cheapest mortgage deals often has a lot to do with the customers individual circumstances. Although there are a large number of different interest rate deals available, the amount of money customers may be able to save will depend on their own circumstances.
Using an offset mortgage for example, may be of the greatest benefit for customers who have a significant amount of money set aside that can be put towards their mortgage. A customer with a mortgage of £250’000 can use their savings amounting to £80’000 to offset their interest. So they will only be paying interest on £170’000.
There are also a number of other types of mortgage agreement that be suitable in the right circumstances, such as afixed, variable or tracker mortgage, and customers who already bank with a provider may also be offered improved rates on their mortgage for their loyalty.