The Money Saving Expert (MSE) Martin Lewis presented his latest edition of the Martin Lewis Money Show Live on ITV1 yesterday (July 12).
The show was an “emergency mortgage special” as the latest figures released by the Bank of England reveal mortgage rates have reached a record high.
The costs have hit the highest level in 15 years, with an average rate on a two-year fixed deal now amounting to 6.66%.
This amount is “worse” than after the mini-budget and has not been seen since August 2018 and the “financial crisis.”
Want to overpay your mortgage with savings? See if it's worth it using this calculator... https://t.co/ZpPavYfGoV #MartinLewis
— Martin Lewis (@MartinSLewis) July 11, 2023
This is what Martin Lewis recommends for those looking for the cheapest mortgage rates to help ease any financial stress.
How can I find the cheapest mortgage rates?
Martin suggested gathering all the details about your current mortgage would be the first step when it comes to looking for cheaper mortgage costs.
He said: “Find out the rate, the type, when your fix ends, if it’s a fix. The term, how long your mortgage will last, any early exit penalties for clearing it.
“Most importantly for everybody out there, you need to know you’ll move to the standard variable rate.”
Big shout out to @MartinSLewis and the @itvMLshow team. Such an informative show with so much useful advice. Thanks for looking after me. Please watch on catch-up or @ITVX if you are worried about your #mortgage I’m back to the day job tomorrow @ITVEveningNews at 6.30 pic.twitter.com/WTEymaHriE
— Lucrezia Millarini (@lucrezianews) July 11, 2023
Commenting on the standard variable rate (SVR) which is an interest rate that will be charged once an initial deal period on a fixed or tracker rate mortgage comes to an end, the financial expert said:
“You don’t want to be on an SVR. If you possibly can, you want to get off that, so you need to know when you’re going to be moved to that.”
You should also find out what the loan-to-value (LTV) is - this is the proportion of the home's current value you borrow.
“The mortgage deal you can get, tends to be cheaper, the lower your LTV, the less you’re borrowing,” he added.
The next step in switching up your mortgage rates would be to look for what other deals are out there, explains Martin.
Some asking where they can watch tonight's emergency Mortgage Special...
— Martin Lewis (@MartinSLewis) July 11, 2023
itv X
(that's the name of the streaming service, not me giving you all a kiss, lovely as I'm sure you are)
“The first thing you want to be looking at is - different to what I would have said five years ago - is check your existing lender’s product transfers.”
He explained: “This is where you get a new deal from the same lender. It used to be a poor route, it used to be expensive, but lately they’ve offered competitive deals.
“It can mean less paperwork, fewer fees and they don’t have to do affordability checks on existing customers.
“Once you know, you’ve got your benchmark, this is what my current lender can offer me - what’s the best on the market?
“The easiest way to find out is get on a comparison site super quick - but don't just focus on the rates.
“You’ve got to factor in the fees, whatever fees they’re charging for switching, and spread that over, say it’s a five-year fix, spread it over five years.
Martin Lewis: Mortgage crisis worsens - typical fixes now cost more than 6.5%.
— MoneySavingExpert (@MoneySavingExp) July 11, 2023
Will rates keep rising? How to find the cheapest deals? What to do if you just can't afford it?
Martin answers these and more ⬇️https://t.co/iqc8NTlwV8 pic.twitter.com/JmhuKBXeqU
“Especially important for smaller mortgages where the fees have a disproportionate impact.”
Martin also reports that using a mortgage broker to help could be useful when finding new deals.
In his MSE Money Tips newsletter, he wrote: “On top of guidance for those who find sorting a mortgage tough, they have details of most lenders' acceptance criteria (not usually publicly available). Plus there are sometimes top deals, and even some product transfers, which are only accessible through brokers.”
You can use the mortgage comparison tool on the Money Saving Expert website to see what cheap rates are available.
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