As part of the DIY Nous method for saving money on household utilities, this is a step-by-step approach after you have named your mortgage provider and double-checked the terms of your contract with them.

Contents of this page

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Can I cancel this service?

Unless you’ve recently had a windfall, you probably can’t suddenly do without your mortgage. However, it is crucial that you keep track of when your fixed term ends, because when it does most providers move you automatically to a variable rate, which can be very expensive.

Can I reduce this service?

The amount you pay each month is based on the rate your provider gives you and the length of the mortgage term. You may be able to reduce your monthly payments by extending the term, this will however mean you’re paying your mortgage for longer so will cost more over time. You may also be in a position to change your loan-to-value ratio (LTV), where more equity in the property or a greater deposit means your rate could be lower.

<aside> ℹ️ See our Mortgages page for more info.

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How to save money on your mortgage

It’s likely that your mortgage payments will be one of your most expensive monthly bills. There are suggestions for various ways you can save on your mortgage below, as well as help and free resources for anyone struggling to make ends meet.

Remortgage: If you’ve come to the end of your fixed term and you’re now on your lender’s more expensive standard variable rate, one of the best ways to save money on your mortgage each month is to remortgage to a fixed-rate deal. You can start the process of re-mortgaging up to 6 months before your existing fixed-rate deal ends.
Extend the mortgage term: You can usually pay less on your mortgage each month by extending the mortgage term. This will mean you increase the number of years you spend paying off the mortgage – and you will pay more overall in the long run.
Reduce the mortgage term: Reducing your mortgage term will make your monthly payments more expensive, but will mean you clear your mortgage sooner so will pay less overall.
Overpay your mortgage: Overpaying your mortgage now helps you save money on interest in the long term by making your overall mortgage term shorter. Some lenders restrict how much you can overpay, and they might enforce an early repayment charge. Read your mortgage documents or contact your lender to get the full details.
Optimise your LTV value: LTV (loan to value) refers to the ratio of the loan amount to the value of a property. It’s expressed as a percentage and is calculated by dividing the loan amount by the value of the property, then multiplying by 100. Better mortgage rates are reserved for those with a lower LTV. For example, if your LTV is 81% you may find you can secure a better deal if you can get it down to 80% by borrowing less or increasing your deposit.

If you are struggling

The cost of living crisis has affected millions of households and if you’re struggling to pay essential bills, you’re not alone.

Some households may need urgent or more specialist help than we can provide. If you’re unable to pay a bill, the first step is to contact your provider and tell them. They are best placed to make sure you are receiving any financial assistance you may be entitled to.

<aside> 🆘 See the list of specialists at Cost-of-living help

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