How to make mortgage repayments easier to afford

May 28, 2017 by Brendan O'Neill

Advice & Tips

Paying a monthly mortgage repayment can be a daunting prospect for many, leaving very little cash to live on. However, it is possible to make some changes so that the monthly payments are manageable.

One of the simplest ways to reduce mortgage payments is to swap your mortgage deal if you are paying the Standard Variable Rate (SVR). As there are so many deals with historically low interest rates available, it could cost thousands of pounds extra if a buyer remains on a lender’s SVR. If you struggle to be accepted for a lower interest rate deal, speak to a mortgage adviser, as studying on a CeMAP training course helps them to gain the knowledge required to help buyers.

Swap to a mortgage which calculates interest on a daily basis, rather than a traditional mortgage which calculates the interest payable over a year. Daily calculations of interest mean that you only pay the interest due on the amount outstanding, rather than the whole amount, which reduces over a year.

If you are sure that you will have a lump sum available or savings to pay off the capital owing, you may want to swap to an interest only product. Although this will reduce your monthly repayments, the lender will want to be sure that you have the ability to repay the capital at the end of the term.

If you borrowed more than 80% of the property price, you may have paid private mortgage insurance, which generally adds thousands of pounds to the outstanding mortgage. If you have repaid a substantial amount, and owe less than 80% of the property value, you may be able to cancel this insurance.