| | | - Review options this Xmas in case best buys vanish, eg, 1.17% 2yr fix
- Huge remortgage savings: 'I'll save £2,400 A YEAR switching'
- Not at renewal? You could bag a rate now to use in 7 months
If you've a mortgage that's due to renew in 2017, your biggest financial risk may well be that rates will rise rapidly. They've been at historic lows and we've got used to that. Yet some of the cheapest deals, such as HSBC's 0.99% 2yr fix, have been axed this month. And the City's swap rates, one of the factors banks use to decide their fixed rates, have risen - eg, 5yr swaps are up from 0.35% in September to 0.87% now. This has all fuelled fears of further mortgage hikes. Of course we can't predict the future. But even if rates fell again, savings for mortgage switchers are likely to be limited compared to today's top deals; yet if they rise, the costs could be huge. So this is our clarion call for ALL mortgage holders: if you've time off this Xmas, try to cut your mortgage costs. JM emailed: "Read your guide, remortgaged, saving £200/mth [£2,400/yr]. Delighted." And Michael wrote: "We moved our mortgage to a five-year fix at a lower rate, lowering our monthly payment and trimming five years off the term. Thanks." Here's what to do... | 1. | Dig out all you need to know about your current deal. To see if you can remortgage (switch mortgage to save), you need the following...
a) What's the rate? And monthly repayment & debt outstanding.
b) What type is it? Fix, tracker, discount, standard variable rate.
c) When's the intro deal over? Eg, when does the 2yr fix end?
d) How long's the full mortgage term? When must it be fully repaid?
e) Will I be penalised? Are there early-repayment or exit penalties?
Crucially find your CURRENT loan to value (LTV) - the proportion of your property's value you're borrowing: £90k on a £100k property is 90% LTV. For each 5% lower your LTV, usually until 60%, the cheaper the deal. So if your home's increased in value since you got your mortgage, you may gain. See LTV help for full info. | | | | 2. | Speedily find your top deal with a mortgage comparison. Your best may be different to someone else's. So bash your info into our comparison tool to get a benchmark for your top deal, then read on.
Mortgage Best Buys
Remortgaging Best-Buy Comparison Tool
(Alternatively, see our First-Time Buyers or Moving Home tools)
Typical current top deals on A £150k mortgage
Links take you to our Mortgage Best-Buy tool | | | | Deal | Rate + Fee | Cost/yr in deal term (incl application fee) (1) | | Typical SVR rate | 4% | £9,500 | | Fix 2yr at 65% LTV | 1.17% + £1,695 | £7,770 | | Fix 2yr at 90% LTV | 1.94% + £1,499 | £8,320 | | Fix 5yr at 65% LTV | 1.9% + £999 | £7,750 | | Fix 5yr at 90% LTV | 2.54% + £999 | £8,310 | | Tracker 2yr at 60% LTV | 1.19% + £995 | £7,430 | | Tracker 2yr at 90% LTV | 2.29% + £999 | £8,380 | | (1) Assumes fee paid upfront, 25yr term | | | | | 3. | BIG savings are possible if you're on your lender's standard variable rate (SVR). This is the rate most fixes and trackers revert to when intro deals end. They're often pricey.
To show you the size of possible savings, here are some major lenders' current SVRs (some have cheaper versions for older customers), which now average about 4% - see SVR help for more:
Barclays 3.74% | Coventry BS 4.49% | HSBC 3.69%
Lloyds & Halifax 3.74% | Nationwide 3.74%
RBS & NatWest 3.75% | Santander 4.49% | Virgin Money 4.54%
Yorkshire BS 4.74%
Now compare those with the rates above and apply this logic: Every 1 percentage-point mortgage cut saves c. £80/mth per £100k of mortgage.
So someone moving from a 25yr, £150,000 mortgage at 4% SVR to a 2yr fix at 1.17% will save £3,400 over 2yrs - even after fees. | | | | | 4. | You can lock in some rates 7mths ahead. With most mortgages, you can apply now & take the money up to 3mths later, which takes you to March. But if you don't need to remortgage till between then & July, there could be an option to still grab today's rates. See it as insurance against potential rate hikes, as there are risks. Here's how it works...
Most major banks go up to six or seven months on some of their deals. So if you find a decent one and lock in, if rates rise before you remortgage, you're quids in.
Yet as you often have to pay fees in advance, if rates fall or there's a better deal when you come to remortgage, it may have been better to wait and you might even decide it pays to dump your reserved rate for the new one, meaning you'll forfeit the fee. That's why we say to see it as insurance - it protects against future rate rises, but at a potential cost. The lower the fees, the less risky it is. For full info on how to find these deals, and the risks, see Long lock-in mortgage help. Plus it's best to check with a broker first - see point 8.
PS: Some lenders are offering existing custs new mortgages many months in advance of their deals ending, and waiving fees to switch. If they're doing this to you, it shows you're their type of customer. But say you'll think about it and do your research or speak to a broker first to check if it really is a good deal. | | | | | 5. | Join our FREE Credit Club to interrogate what lenders really think of you. Your credit history's a huge part of whether you'll be accepted for any type of credit, incl mortgages. Our revolutionary, totally free MSE Credit Club tries to demystify the acceptance process and uncover the true picture of your overall financial appeal, for all manner of products.
It includes a free Experian Credit Score. But lenders don't stop there - and we wanted to mimic what they do more closely, so we don't stop there either. It also includes your unique Affordability Score, a Credit Hit Rate that tells you which cards & loans you've the best chance of getting, and tips on how to boost your score. | | | | 6. | Should I go for a fix or tracker/discount? With a fix, the amount you repay is, er, fixed - it provides certainty against possible rate rises. Variable deals such as trackers or discounts move with UK interest rates, or sometimes just at a provider's whim.
No one can predict future rates, so focus on your finances - the more crucial the surety of knowing the cost, or the more worried you are by uncertainty, the more you should hedge towards fixing - and fixing longer. Plus generally you'll only pay a touch more to fix. See Fix vs Variable help. | | | | 7. |  Get our FREE 60-page Remortgaging Booklet. Your mortgage is likely your biggest expenditure, and just because you've done it once, doesn't mean it's the same this time around. So be sure you know what you're doing. Our guide takes you through it step by step.
- Remortgage Booklet 2016: Download instant PDF | Order printed
- Remortgage-help 5-min video: Sometimes it's easier to watch than read. See the short remortgage help video. | | | | | 8. | You can go it alone... but it's often better with a broker. Brokers have info that's often difficult to find, eg, lenders' credit and affordability criteria and what properties banks'll lend on. A good broker can match you to the right deal - see Top mortgage brokers.
However, a few lenders, eg Yorkshire Bank, cut brokers out and sell only direct to the public. So some brokers can and do exclude them - we suggest you use a broker alongside our mortgage comparison, which has all these deals. | | | | | 9. | Remember the fees - our free tool factors 'em in... If you've a small mortgage (eg, sub-£100k), the bigger the impact of valuation, legal and other fees. Factor these in over your deal period to work out the true cost. Our MSE Total Cost Assessment in our best-buys comparison factors in fee and rate for your cheapest deal. | | | | | 10. | Don't think just because you can afford monthly payments, you'll pass affordability tests. For the past three years, lenders have had to stress-test if your mortgage would be affordable if rates hit 6-7%. They want evidence of income, bills, expenses, even eating out. So being frugal in the months before applying helps.
We're fans of 'affordability checks' as they ensure you don't push your finances too far - yet they're not logical for many remortgages, and ridiculously, people are being told they can't afford a CHEAPER deal. We've had tweets such as: "No changes or missed payments. No debts bar new cars. £90k equity. Yet no one'd give us a mortgage."
These rules stem from UK regulator the Financial Conduct Authority's interpretation of the EU Mortgage Credit Directive. While Brexit means this may eventually change, many are caught NOW. We've called for an urgent review of the UK interpretation, with some success - see Mortgage Prisoner Result. Please email if you've been trapped. | | | | | 11. | With rates so low and the threat of hikes, should you ditch your fix? Use our Ditch your fix? tool to check if you can save by switching from a pricey fix. It won't work for all, due to exorbitant early-repayment fees - but why not check, just in case?
Eg, if you've a 3.49% fix with 23mths left on a £100,000 mortgage, you could save if you can switch to anything better than a 1.51% fix with a £1,000 arrangement fee, even taking into account £2,800ish extra switching fees (incl early exit charge, legal & valuation fees). | | | | | 12. | Calcs galore to test your options. Now you know typical rates, use our mortgage calcs to compare 'em and see what you could save:
Ultimate Mortgage Calculator
Eight tools to home in on the right answer for you, incl...
Basic Mortgage Calc | Compare Two Mortgages | Mortgage Overpay Calc | Compare Fixed Mortgages | Ditch Your Current Fix? | | | | | 13. | Savings stashed away? Use 'em to bag a better mortgage. The lower your LTV threshold, the better the deal you can get. They drop in 5% chunks from 95% to 60%, so use savings to get into a lower threshold and you can save big. For example...
If you've a £150,000 home, and want a £137,000 remortgage, that's 91% LTV, and the top 5yr fix is 3.98%. But use £2,000 of savings to reduce the borrowing & you'd be at 90% LTV - where the top 5yr fix is 2.54%, saving c. £1,300/yr in monthly payments alone.
See Should I overpay my mortgage? for more, incl who shouldn't do this, plus use the Mortgage Overpayment Calc to see how much regular overpayments can help. | | |
PS. We hope you have a very merry Christmas. And, as it’s that time of year, we wanted to give a gift to you, so we’ve paid for 2,000 people to have access to safe water in at-risk parts of the world on your behalf. (On the charitable gift theme, our Charity Gift guide is packed with similar ideas, incl donating for free.) | | | | | | | | | | | | | | | | | | We've waited ages for a no-landline corker and this Virgin one for £18/mth with £15 set-up can more than halve costs
We can't remember bringing you a widely available top deal that didn't require a compulsory landline - they're rarer than a bloodied steak. So if you're one of the 64% who tell us you hardly or never use your home phone, and you need a faster fibre connection (best for gamers, streamers or multiple users), this is a Christmas cracker... -
 Hot fibre broadband from Virgin (no landline needed). Via this Virgin fibre link*, anyone who doesn't have Virgin Media now and is in one of the 50%+ of eligible UK households (you're told before applying) can get this up-to-50Mb speed (about 3x standard) unlimited broadband deal on a 1yr contract. It's avail till 11.59pm on Thu 29 Dec. Here's what you pay: -
Unlimited fibre broadband £18/mth for 12 months. It then rises to £32.25/mth. You pay £14.99 installation. There's no charge for the router or delivery.
Cost analysis: It's a steal. The total is £230.99, equivalent to £19.25/mth. That's less than half the standard rate fibre and landline costs that many are paying of up to £540/yr, and way cheaper than many standard speed + landline deals too.
Can I get cashback elsewhere? Regular cashback site users may be able to, but often on different deals. It can also change daily, so check. -
Need fibre with a landline? £420 over 18mths, equiv £23.33/mth, from today (Wed). The cheapest is this scorcher from Plusnet. -
Don't need fibre? Standard speed broadband & line for £172 a year, equiv £14.37/mth. The market's current cheapest is Origin Broadband at £172 for a year (there's nothing decent for broadband-only). Full options in Cheap Broadband. | | | | | Boxing Day/Jan sales ON NOW, incl up to 50% off at Asos, Gap & River Island. A few stores even let you order in time for Christmas (eg, Asos, order by 8pm Fri). See our full list of Boxing Day & January sales.
Track Santa as he delivers prezzies worldwide. Nifty way to watch his progress. More Santa freebies, incl video
HUGE Xmas decorations sales, eg, House of Fraser up to 70%, M&S 50%, John Lewis up to 30%. Full info: Cheap decorations.
Mulberry up to 50% off handbags sale? Not MoneySaving, but if you're going to buy one, do it as cheaply as you can. Based on previous years, we predict it'll repeat the up to 50% off sale on bags, clothes & accessories (last year a £795 small Alice tote bag was £557). See Mulberry Deals & more festive forecasts in our Christmas Deals Predictor.
Free winter wonderlands & 100+ other cheap tips for festive family fun. Incl Christmas baking ideas at home, £42 Ripley's family ticket. See 100+ festive family fun tips. | | | | | | | | | |
A new balance transfer card pays off existing credit & store cards, so you owe it instead but at 0%, for a small fee. So you're debt-free quicker, as repayments cover the debt, not interest. The AA gives new credit card customers £50 cashback within 90 days of shifting at least £1,500 to its up-to-37mths 0% card. See that as offsetting the fee, making it the cheapest of all the super-long 0% cards (37-41mths) on sub-£4,700 transfers. On £1,500-£1,999 you'd be in profit.
Will you be accepted? Our Balance Transfer Quick Eligibility Calc shows which cards you've best odds of getting, or join our FULL Credit Club, where you also get free Credit & Affordability Scores. Both do a 'soft' search on your credit file that lenders can't act on, so there's no impact on your creditworthiness. And for some cards the calcs show which providers 'pre-approve' you, and will definitely give you the card, subject to an ID check.
-
Tip 1: Go for the lowest fee in the time you're sure you can repay. Calculate how long you need to clear the debt, add a bit for safety, then pick the lowest fee within that time. Unsure? Play safe and go long, even with a bigger fee. -
Tip 2: Some have an 'up to' 0% length, so you may get a shorter deal even if accepted. That's why we include the best options where you know the deal for sure if accepted (our eligibility calc says if you've good odds). -
Balance Transfer Golden Rules. Full help, get cashback & ALL best buys: Balance Transfers (APR Examples).
a) Never miss the min monthly repayment, or you could lose the 0% deal and it'll cost far more.
b) Clear the card or balance-transfer again before the 0% ends, or the rate rockets to the higher APR.
c) Don't spend/withdraw cash on these. It usually isn't at the cheap rate and cash withdrawals hit your credit file.
d) You must usually do the balance transfer within 60/90 days to get the 0% & voucher or cashback. | | | | | | | | | They can get this email free every week | | | | | | | | | The same drug, same manufacturer, massive price variation. We tell you the tricks to look out for this winter
The cold and flu season may be reaching its snot-filled crescendo, but don't think pricier pills mean a magical cure. In fact, you're often just paying for fancy packets & advertising with the same drug inside. Our Cheap Medicines guide has 20+ remedies, but here are our top tips to see you through the winter: -
 How to spot identical cold & flu remedies. We suspect many of you know that if a product has the same active ingredient, it has the same effect (more on that below). But also check the 'PL number' on the packet or on the information leaflet inside. It's a unique licence number assigned exclusively to a particular product made by a particular manufacturer, which may be sold under different brands. Yet if the numbers match, it's THE SAME product.
Eg, the Boots and Wilko tablets pictured have the same PL number (12063/0066). But MSE Megan found Wilko's version for 95p compared with Boots' for £3.29 - a £2.34 difference. Other brands we compared with cheaper identical alternatives include Beechams, Calcough, Sudafed and Lloyds. See more in Identical cold & flu meds. -
Look for the same active ingredient - Nurofen is £2 pricier. It's the active ingredient that matters. The rest is irrelevant (unless you've certain allergies), though liquid capsules work quicker and some taste different. Megan found 100ml of Nurofen for Kids liquid for £2.99 at Savers discount store. Yet the same store sold 100ml ibuprofen suspension (the active ingredient) for 95p. See cheap generics for Calpol, Benylin, Lemsip & Vicks. -
Get free meds for coughs, colds and more. If you or your child gets free prescriptions, the little-known minor ailment scheme often means you can get other free meds too, eg, paracetamol, eye drops, creams. -
Get free or cheap flu jabs. It's not too late to get one to help stay healthy this winter, and some can get 'em free - if not, check you're not overpaying. See Free or cheap flu jabs. | | | | | Shopping online? INSTANTLY compare prices at scores of stores. A shopbot, or shopping robot, compares a range of e-tailers in seconds to find the best price. Our MegaShopBot finds the best for whatever you're buying.
SUCCESS OF THE WEEK: (Send us yours on this or any topic)
"Having used your Resolver flight delays tool I've received a £1,700 refund from a 2012 delay. Thanks. We'll have an excellent Christmas and have booked a holiday using the cash."
'Free' £10 money transfer code. MSE Blagged. Use our code by Fri and you'll get £10 off when you do a bank or SWIFT transfer via Azimo (min £50). It's authorised by the UK Financial Conduct Authority, though that doesn't mean transfers are risk-free. Money arrives in 1-3 days and it sends to 190+ countries. First transfer only. Full fees, rates and info in Sending Money Abroad. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Wed 21 Dec - Share Radio, 11.20am
Wed 21 Dec - BBC Radio Cumbria, 'Money Talks', from 6pm
Thu 22 Dec - BBC Radio Tees, 10.35am
Fri 23 Dec - BBC South West stations, breakfast
Tue 27 Dec - BBC Radio Cambridgeshire, 2.20pm | | | | | | | Q: I've got loads of current accounts that pay interest. Santander and Nationwide have paid me without tax taken off, but my Halifax Reward cash is still paid with tax deducted. I know I have a £1,000 tax-free allowance on interest made, so why has Halifax done this? Keith, by email.  MSE Rosie's A: It all comes down to the way the payments are classed. Santander's 123 and Nationwide's FlexDirect and FlexPlus accounts officially pay interest, which like all savings income is paid gross (ie, with no tax taken off) and falls under your personal savings allowance, where basic-rate taxpayers get the £1,000 tax-free.
However, the monthly payments on the Halifax Reward account don't count as interest for tax purposes and instead are classed as 'annual' payments. The rewards don't count towards your PSA, and they're still liable to be taxed - hence the payments haven't changed since the PSA's introduction in April. For more info, see our Best Bank Accounts guide. Please suggest a question of the week (we can't reply to individual emails). | | | | | | | That's it for this week, but before we go... We'd like to put your knowledge to the test with our MSE Christmas quiz. Can you answer Martin's 'tricky and trick' questions? One of them is "what does the 'S' on Superman's outfit signify?" (Clue: it's not Superman.) There's also the MSE Helen round. Give the MSE Christmas quiz a go and let us know... We hope you save some money,
The MSE team | | | | | | |
