How homeowners can stay afloat

Mortgage rates seem to be constantly on the rise right now with no sign of slowing down or stopping. If you’re a homeowner, you might already have found a new deal, or you might be burying your head in the sand, worried about what the future holds. If it’s the latter, we’re here to help.

Today, the typical rate for a two-year fixed mortgage is just over 6%, forcing many households to find hundreds of pounds extra each month when their current deal comes to an end. Fortunately, there are many things you can do to ride the interest rate wave with confidence and come out the other side with your finances and sanity in check.

In this edition of Ask Alextra, we sit down with Lisa Boulton, our Mortgage and Protection Advisor, to talk about interest rates and the strategies homeowners can use to manage their mortgage and household finances.

My 1.05% fixed mortgage deal is due to end in a few months. I’m worried about how much extra a new deal will cost. What can I do?

“The new interest rates can look daunting, especially when you work out how much extra money you’ll need to find every month. Also, people’s situations can often change during their fixed deal. For example, you might have had children since and be paying childcare costs.

The most important thing you can do now is to speak to me or one of my colleagues. We’ll use our budget planning tool in the first instance to see if there are any areas where you can save money. Any savings we help you to make can be put towards the new mortgage payment. Our clients are often amazed at the savings they can make through our suggestions and recommendations.”

We’re already stretched to the limit and struggling to make ends meet. Is there anything else we can do?

“Absolutely. If your budget doesn’t allow much leeway, we’ll look at ways you can make your mortgage payments more affordable. While we can’t control interest rates, there are other ways we can help. For example, you could extend the term of your mortgage. This allows you to pay less each month and free up funds.

However, it’s important to remember that you’ll be paying your mortgage for longer and more interest overall. I’d be delighted to tell you more about the pros of extending your mortgage term and also the downsides so you can go in with your eyes wide open.”

But I’ve made such good progress on my mortgage. Won’t extending just undo all my hard work?

“The situation the economy is in right now is only temporary. I remember when I bought my first house years ago, it was a similar situation. Interest rates will come down again, and when they do, you can start to look at ways to get back on track with your mortgage goals. For example, when your finances are looking healthier, you might want to reduce your mortgage term or make overpayments.

You don’t even need to wait until your deal ends to extend your mortgage term. If you’d like to find out more about this option, I’d be very happy to tell you more and show you how much you could save by extending.”

I’m thinking of taking out an unsecured loan to get me through these tough times. Is that a good idea?

“Unsecured credit, such as credit cards and loans might seem like a good choice if you’re struggling to make ends meet. However, they can cause more harm than good in the long run. Adding more credit to your credit profile will likely bring down your score and this could raise some red flags with mortgage lenders when you apply for a new deal.

Instead, speak to our team to arrange a budget review. This is a great way of finding ways you can save money that will make any new higher mortgage payments more affordable and manageable.”

Can you help me to find a new mortgage deal?

“We’d love to. We’ll tailor our advice and the products we recommend to your personal needs and situation. And because we have access to hundreds of products, we find deals that may not be available to you on the high street. You don’t need to wait until your deal expires. If you’ve got six months or less remaining on your current deal, speak to us now.”

Get Expert Mortgage Advice Today

At Alextra Mortgages, we’re always here to help no matter what your circumstances. We bring you expert advice, some of the best products on the market, and peace of mind that you got the best deal for your situation. Speak to our team today to get started.

Call us on 01270 250800. Email us on planningteam@alextragroup.co.uk

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.