Can I Lower My Mortgage Payments?

If you’re finding your monthly mortgage payments are becoming too much to handle, don’t despair there are things you can do to lower them.

With lenders hiking their mortgage rates on a regular basis, more people are finding it harder to pay their mortgage, so don’t worry, you are not alone. These few questions should help you decipher if there is a way to lower your payments.

1, Remortgaging

• A) I am currently on my lender’s Standard Variable Rate
• B) I am coming to an end of a fixed rate period
• C) I have just signed up to a new mortgage

2, Extending Your Mortgage

• A) I am in my twenties/thirties and my mortgage is for 15 years
• B) I have my mortgage over 25 years but I am only in my twenties
• C) My mortgage is for 25 years, I am in my forties

3, Moving House

• A) I live in a large property and could scale-down and still have plenty of room
• B) I don’t really want to move to a different area/scale down, but it is a possibility
• C) I already live in a one bedroom house and moving isn’t an option

4, Switching to Interest Only/Taking a Payment Holiday

• A) I have always paid my mortgage on time and when I took out my mortgage I was told a payment holiday or converting to interest only was an option
• B) This is an option but I would prefer to keep paying some of the capital balance
• C) I am already on an interest only option and have taken one holiday payment before

5, Adding Somebody to the Mortgage

• A) I live with my partner and there is a good possibility they would be willing to get their name on the mortgage and pay more than they do in rent now
• B) I don’t really want to add somebody to the mortgage as there is nobody applicable
• C) The mortgage is already in mine and my partner’s name, so adding somebody else is not an option

If You Mainly Answered A

You are in a good position to reduce your monthly mortgage costs and it appears there are some steps you can take to make this happen.

Millions of people are unaware that by switching from their lender’s Standard Variable Rate they could save hundreds. The SVR is the rate that you start paying once your fixed rate or tracker rate expires, but this is normally a high rate. You should speak to a mortgage broker or lender about other rates you could remortgage onto. If you are really stuck you could always downsize your property or extend your mortgage period.

If you are still young enough to add a few years to your mortgage this could dramatically reduce your payments. Although not ideal, you could use it as a short-term measure and shorten it again once you are on your feet. Taking a payment holiday or switching to interest only is an option, but a mortgage lender might be picky when it comes to this, so it is worth speaking to them first.

If You Answered Mostly B

It sounds like there are things you can do to reduce your mortgage payments, but you might have to be flexible. You could downsize or extend your mortgage period. If you are coming to the end of your current fixed rate period there is a good possibility you will be able to find a better deal elsewhere. But be warned, it may also mean that your mortgage payments could go up, so brace yourself.

If you have fallen on hard times and just need to reduce your payments temporarily, your first stop should be your mortgage lender who should be able to help. If this fails, you should visit a fee-free mortgage broker to see if they can offer you any additional advice.

If You Answered Mostly C

I’m afraid it’s bad news, it looks like you have already maxed out any options that you may have had. You may want to consider selling and switching to rented accommodation. There are however schemes available from the government that are aimed at helping people stay in their property.

A visit to your local Citizens Advice Bureau should help you decipher whether these are applicable to you. It is also important to keep in constant contact with your mortgage lender, as they will want to help you as much as possible.

Keeping up with growing mortgage payments is not always easy and with an unpredictable interest rate you can find yourself suddenly paying more. This along with growing unemployment means that more people than ever are in financial difficulties, but if you do find yourself in this situation it is important to seek help as soon as possible.