· Hal Rain · House  · 4 min read

How to Save Money on Your Mortgage in the UK

A mortgage is one of the biggest financial commitments you'll ever make, but there are plenty of ways to cut costs and save money over time. Whether you're a first-time buyer, remortgaging, or simply looking to reduce your monthly payments, here’s how to save money on your mortgage in the UK.

A mortgage is one of the biggest financial commitments you'll ever make, but there are plenty of ways to cut costs and save money over time. Whether you're a first-time buyer, remortgaging, or simply looking to reduce your monthly payments, here’s how to save money on your mortgage in the UK.

1. Shop Around for the Best Mortgage Deal

Different lenders offer different interest rates, so it pays to compare deals.

Where to Compare Mortgage Rates:

  • MoneySuperMarket – Offers a comparison of the latest mortgage rates.
  • MoneySavingExpert – Provides mortgage calculators and best-buy tables.
  • Habito & Trussle – Online mortgage brokers that find the best deals.
  • High Street Banks & Building Societies – Some lenders offer exclusive deals not listed on comparison sites.

Tips for Getting the Best Rate:

  • Check fixed-rate vs. variable-rate mortgages to see which suits your financial situation best.
  • Use a mortgage broker to access exclusive lender deals.
  • Avoid paying high arrangement fees, which can add to the overall cost.

2. Improve Your Credit Score

A higher credit score can qualify you for lower mortgage rates.

How to Boost Your Credit Score:

  • Pay all bills on time, including credit cards and utilities.
  • Register on the electoral roll to prove your address.
  • Reduce existing debts before applying for a mortgage.
  • Check your credit report for errors using Experian, Equifax, or TransUnion.

3. Save for a Bigger Deposit

The more deposit you put down, the lower your loan-to-value (LTV) ratio, which can lead to better mortgage rates.

Why a Bigger Deposit Helps:

  • Lower interest rates – Lenders offer better deals for lower LTV ratios.
  • Smaller monthly repayments – Borrowing less means lower payments.
  • More mortgage options – Some exclusive deals require at least 20-25% deposit.

4. Overpay Your Mortgage

Overpaying even small amounts can save thousands in interest and help you become mortgage-free faster.

How Overpayments Save Money:

  • Reduces the total interest paid over the term.
  • Shortens the mortgage length, meaning you pay it off sooner.
  • Some lenders allow overpayments of up to 10% per year without penalties.

Check with your lender before making overpayments to ensure you don’t incur fees.

5. Remortgage for a Better Rate

If you’re on a standard variable rate (SVR), you could be paying more than necessary. Remortgaging to a better deal can save you money.

When to Consider Remortgaging:

  • Your fixed or discounted deal is ending.
  • Your property has increased in value, lowering your LTV ratio.
  • Interest rates have dropped since you took out your mortgage.

Use a mortgage broker to help find the best remortgaging options.

6. Extend Your Mortgage Term (With Caution)

Extending your mortgage term (e.g., from 25 years to 30 years) can lower your monthly payments, but it may cost you more in interest over the long term.

When Extending Your Mortgage Term Makes Sense:

  • If you’re struggling with monthly repayments and need short-term relief.
  • If you plan to overpay later when your finances improve.

7. Avoid Unnecessary Fees & Charges

Some mortgages come with high arrangement fees, early repayment charges, and valuation fees that can add to the cost.

How to Minimise Fees:

  • Look for fee-free mortgages where possible.
  • Avoid switching mortgages frequently if there are early exit fees.
  • Ask your lender if they offer free valuations or cashback deals.

8. Consider Government Schemes

If you’re struggling to get on the property ladder, government schemes can help reduce your mortgage costs.

Available UK Schemes:

  • Help to Buy – Offers equity loans for first-time buyers.
  • Shared Ownership – Buy a percentage of a home and pay rent on the rest.
  • Lifetime ISA – Get a 25% government bonus on savings for a first home.

9. Rent Out a Spare Room

If you have extra space, consider renting it out to help with mortgage payments.

Rent-a-Room Scheme:

  • Earn up to £7,500 per year tax-free by renting out a furnished room.
  • Helps cover mortgage costs with minimal effort.

10. Review Your Mortgage Regularly

Many homeowners forget to check if they’re still on the best mortgage deal.

What to Check Each Year:

  • Are you still on a competitive interest rate?
  • Can you afford to overpay?
  • Are there any new deals available that could save you money?

Conclusion

Saving money on your mortgage in the UK requires careful planning, regular comparisons, and taking advantage of available deals. Whether you’re remortgaging, overpaying, or improving your credit score, these strategies can help you reduce costs and pay off your mortgage faster.

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