Mortgage Savings Strategies for Financial Freedom
A good interest rate can save you some money on your mortgage but to take years off your mortgage you need a mortgage strategy and a great structure. It's important to us to help you get the mortgage but also to help you get rid of it.
So what is the best structure right now? There is no best because it varies based on peoples circumstances but we can share what most of our clients are doing right now based on our advice.
1) Short term fixed interest periods are better: There is slim chance of rates increasing in the next 12 months but the longer we look forward the less confident we can be. I would rather be coming back to re-fix sooner rather than later. Also you can get 3.05% on the 1 year and 3.35% on the 2 year so if you re-fix for 1 year at 3.05% and come back to the table in a year rates would have to be higher than 3.65% for the next year for you to lose out. Thats unlikely.
2) It's good to split your mortgage so that is doesn't all come up for re-fix at an unlucky time for you. As described above the 2 year isn't really competitive but the 18 month rate is as low as the 1 year.
3) Use an offset facility: An offset facility allows your bank accounts to count against your mortgage interest calculation. As you receive income and save, these funds can be offset against your mortgage as if you have paid the funds against the mortgage. This is a very effective technique to taking years off your mortgage but you have to get the amount right. Offset facilities are at a higher loan rate and a lot of people make the mistake of having too much of their mortgage on offset and they shoot themselves in the foot paying more interest and not less.
As the world changes and clients lives change, our advice on structure will also, so the key for us is to keep coming back to existing clients to make sure they continue to have a mortgage plan and structure that will take many years off the life of their mortgage.
Our mortgage advice is free as we get paid by the lenders for the work we do, but we are on your side, and we have made a read difference to many people.