7 Managing your mortgage

Another way to reduce the cost of borrowing is by reviewing and potentially changing your mortgage if you are a homeowner.

Your mortgage and your pension are usually the two biggest and most important financial products you will have to manage in your life. So you should pay maximum attention to both, with the aim of making sure your mortgage is repaid before you retire and your pension savings offer you a comfortable retirement income.

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The image is a drawing of a house with two stacks of coins and a single coin on the front left. On the right of the house is a tree.

As the cost of borrowing has increased in the last few years you may be facing higher monthly repayments if you’re on a fixed rate options that’s coming to an end. Comparing different products and lenders could produce savings.

There are two particular circumstances which should trigger a review of your mortgage:

• If you find yourself on the lender’s ‘standard variable rate’ (SVR) mortgage you could see if there’s an alternative that might suit you better. This could involve either moving to another variable rate deal – a ‘tracker’ rate mortgage – or to a fixed-rate deal. And be prepared to move to a new lender too if this is required to get the best deal.
• If your fixed-rate deal is coming to an end in the near future, start to check the market to see what the new rates are. If the rates are higher it’s better to prepare for the impact on your finances. Guidance from a mortgage adviser could be helpful.

Next there’s a short quiz to check what you have learned from this session.