As the weather begins to warm up, many will be starting to think about giving their homes a seasonal spring clean. But with soaring cost of living rising, now is also a good time to give your finances a spring clean. A mortgage is one of the biggest monthly commitments you can make, so it’s important to also give this a little TLC.
Brian Murphy, Head of lending at Mortgage Advice Bureau, shares his top tips on how to spring clean your finances and your mortgage.
1. Check your current mortgage deal
A mortgage is one of the biggest financial commitments you can make, so it’s important to make sure you’re on the best deal possible for your situation – not doing so could become costly over time. Be sure to check what your current deal is and if you could reduce your mortgage payments by switching. A whole of market mortgage broker can help you browse for the best deal possible – but be aware of any fees and charges you may incur from switching from your current deal, particularly if leaving early.
2. Avoid falling onto a lender’s SVR
If your mortgage deal is about to come to an end, or indeed has ended, you will end up reverting onto your lender’s Standard Variable Rate (SVR). Often, these mortgage rates are more expensive than fixed or variable benefit period mortgage deals, which means you could pay hundreds of extra pounds per month compared to other deals in the market. Make sure to check your mortgage deal and switch your mortgage to avoid falling onto an SVR.
3. Create a budget
Organising your finances could be more important than ever before. Using a budgeting calculator can help keep you on track with what income and outgoings you have, be that for your rent, mortgage or other expenses, while also keeping you on target for any savings you want to make.
4. Cut costs where you can
Cutting costs is undoubtedly essential, but they also need to be feasible. It’s good to understand what income you have compared to your outgoings, so you can prioritise what you do or don’t need. For example, what subscriptions or memberships do you have that you’re not using? Are there any household bills you can get better deals on? In the current climate, being able to spare any cash, no matter how big or small could prove very important.
5. Upsizing vs renovating
Analysis from Mortgage Advice Bureau revealed where the biggest savings can be made for homeowners to renovate their homes, instead of upsizing. For those looking to plan their next home improvement, Mortgage Advice Bureau has an online tool which provides users with a construction project cost estimate vs. the estimated value the home extension or renovation could add to the overall property price. All you need to do is input a few details about the project and your current mortgage, then the calculator works out how to finance the home improvement through remortgaging – this is where homeowners release equity built up in their property to raise additional funds for the project.