We’re in the middle of an interest rate storm and today I’ll talk about my mortgage - a brief past, present and future if you like with three tips based on my mistakes, learnings and mindset. Let’s go!

PAST

Let’s mention the good old days. My previous mortgage was with TSB, the rate was 1.19% and it was fixed until the end of August this year. So, like all mortgage owners, I had 3 options: wait and see if my current lender had a good offer and stay with them, take action immediately and lock a good rate with another lender or do nothing and let my fixed mortgage turn into a toad… I mean, to my lender’s standard variable rate. I’m not a fan of variable rates so the last option was not an option and we all know how quickly interest rates have been increasing this year so I decided to remortgage. AGAIN!

Let me tell you about the mistake I made so that you can avoid it. I’m not an employee so getting a mortgage can prove tricky. It’s even more complex when you mix income from a limited company with income from contracts through an umbrella company. In the past, I used a mortgage broker who would specialise in products for people like me, tricky people. And for whatever reason, this year, instead of contacting that broker straight away, I decided to go with Habito. Ever heard of Habito? They’re the no-fee broker. I’d registered with them years earlier and decided to give them a go. Big, BIG mistake! The broker who was dealing with me wanted more and more documents, even when I initially provided him with pretty much everything he’d need. Long story short - it was obvious that he never dealt with customers whose needs were beyond a few payslips and a contract of employment. Once he realised that, he simply dropped me. So I quickly contacted my competent broker and from there it was smooth sailing. So where’s the mistake? My current mortgage is a 5-year fixed at 1.98%. The one I applied for through Habito was with the same lender, fixed for the same amount of years but at 1.68%. Had I contacted my efficient mortgage broker first, I would have saved £2.5k in interest. That’s a costly lesson so here’s my tip number 1 for you - when you remortgage, treat it like a marshmallow test. Avoid instant gratification of no-fee brokers who won’t be able to help you or skipping a broker altogether. Thing long-term. Find a mortgage broker who works with income sources and circumstances like yours, they always have access to better products and will save you money and time. 

PRESENT

And here we are. My new mortgage started in September and now I can focus on other things. I tend to stress about remortgaging so the moment that first new payment went through… instant relaxation. There’s always the debate about owning versus renting and I don’t believe there is a wrong or right answer that applies to everybody. But to me, living in London, in 2022, and having at least 4 years of no thinking about remortgaging or moving - feels like signing a lease with a decent landlord. It frees so much mental space for both my boyfriend and me… that I can’t help but feel grateful.  We can pay more attention to other things, develop old and pick up new skills, take some risks related to employment… the list goes on and on.

Your situation is definitely different to mine. Maybe better, maybe worse but whatever it is - here’s my tip number 2: appreciate what you’ve got. I live in a house that needs insulation, sound proofing and new windows. I live next-door to super noisy people. And yet, I never take the walls of my house for granted.

FUTURE

Five years is quite a while and I wouldn’t be me if I didn’t have at least some plan related to my biggest debt. Here’s what I’m doing in a nutshell: overpaying! If you watched my Overpay and Invest series, you know that I’m a big fan of both. My approach last year was to overpay 100 pounds per month - more or less 10% of my monthly payment. With this increased mortgage however, my plan has changed. I’ve started using Sprive - which is a pretty awesome app that lets you quickly overpay your mortgage. I don’t want to commit to set amount this time but Im still keen to make some additional payments without the usual hassle. You know, just quickly be able to send that money that I didn’t spend on a take-out for instance. Besides, when I overpay my mortgage, I want to immediately see how much it saves me in interest. Without a spreadsheet. So Sprive came in handy. But it’s much smarter than that and just takes a few minutes to get started. Simply download the app, connect it to your current account, Sprive will then set aside an amount you can afford and you can make overpayments with just a few taps on your phone. If you decide it’s not a good time to make overpayments, you can easily pause or withdraw your money back. Savings - he-hey!
If you want to give Sprive a go, and get £5 for signing up, feel free to use my referral link here.

Apart from overpaying my mortgage, since I’m with Halifax, I registered for their monthly mortgage draw and intend to make sure that I meet all their rules, just in case I win. Because - you never know! So my final tip for you today is: keep investing but do make sure you also overpay your mortgage. 

And that is it all my folks. When dealing with your mortgage, take a long term view, appreciate what you’ve got and make sure you do overpay that good debt when you can. I’m doing all three.