Money expert Martin Lewis explains how to find the cheapest mortgage
The financial expert said: “Over the last couple of years we’ve had it good, mortgages are at historic lows.”
However, Martin claimed this will come to an end, and as interest rates rise and so will standard mortgages.
Martin claims standard rates feel cheap but aren’t because they are higher than interest rates.
The money expert said it is prudent to borrow as little as possible on your mortgage to avoid paying a lot back.
ITVMartin Lewis explained how to find the cheapest mortgage in 2017
For example, if you have a £150,000 home and you borrow £136,000 you will be paying 91 per cent loan to value (LTV) - meaning the loan id 91 per cent of the value of the house.
In this instance you will pay four per cent back.
If you borrow only £1,000 less at £135,000, 90 per cent LTV, you will be paying back only 2.5 per cent. That means a £1,100 a year in savings.
Current house price values are counted, so if house prices have gone up that could help you get a better deal on your mortgage.
ITVThe money expert said it is prudent to borrow as little as possible on your mortgage
Mon, December 19, 2016
Mortgage advice from the Money Saving Expert
Martin also advised a couple how to get the cheapest deal when extending their house.
The couple wanted to borrow £25,000 to extend the house, which they could put on the current mortgage, or get a personal loan.
Martin explained extending the mortgage would mean they would pay more, as they would be borrowing for longer.
He said: “Get a mortgage and then over pay it to be the equivalent of paying off a loan, clear the debt within five years so you take advantage the cheap mortgage rate but no the disadvantage of spreading the repayment over a long period of time.”
ITVIf house prices have gone up that could help you get a better deal
In brief, the expert's advise was: “Borrow the minimum you can do and you will get a cheaper mortgage.”
Martin kicked off the New Year with his first money saving tip on Good Morning Britain - how to safely and quickly shift your credit card debts.
A balance transfer can cut hundreds or even thousands off the cost of existing borrowing, according to the Money Saving Expert Martin Lewis.
The term 'balance transfer', for those not in the know, is where debters take out a new credit card to pay off debts on old cards.
This means debter then owes the new lender, but at a far lower rate. Thus hopefully meaning you’re debt free quicker.