| | | Martin's Weekly Briefing: For more tips, alerts & puns, follow Martin on Twitter - Rates down to 2% even with just a 90% LTV (so a 10% deposit)
- EVERYONE with a mortgage, check now to see if you can save
- 13 ways to slash costs for first-time buyers and remortgagers
Mortgage rates are rock-bottom right now, especially for first timers with smaller deposits or existing homeowners with limited equity in their home.
Two years ago if you borrowed 90% of the property value (a 10% deposit) the cheapest 2yr fix was 3.48% - now it's 2.04%, which on a £200,000 property is a saving of £5,050, even including fees. And for 95% LTV (5% deposit), rates are down too, from 4.79% to 3.29%. So here are my 13 top mortgage tips... | 1. | Every homeowner - check if you can save £1,000s on your mortgage. Check if you can remortgage (where you get a new deal without moving home) to substantially cut costs. This can mean big savings; as Caroline posted on my Facebook page: "Got a new deal saving £128/mth, £3,000 over 2 years. Thank you, Martin."
To work it out there's a range of info you'll need, crucially...
a. Your current rate, monthly repayment & outstanding amount: If you're stuck on your lender's standard variable rate (SVR), it's especially likely you're overpaying, as these typically range from 4% to 5%. So big savings are likely.
b. Type: Is it a fix, tracker, discount or SVR?
c. Deal deadline: If it's a short-term deal (eg, 2yr fix), when it ends.
d. Term: How long it is, eg, 25yrs, and when it must be fully repaid by.
e. Penalties: Are there early repayment or exit penalties? If so, these often kibosh your ability to save.
Crucially, find your CURRENT loan-to-value (LTV) - the proportion of the value you're borrowing: eg, £80k on a £100k property is 80% LTV. For each 5% lower your LTV is, until 60%, the cheaper the deal. So if your home has increased in value since you got your mortgage, you may gain. See LTV help for full info. | | | | | 2. | First-time buyers - save in a Help to Buy ISA for a free £3,000. For anyone 16+ who's never owned a home, this is the place to save for a mortgage deposit. That's because as well as interest you get 25% added on top, up to a free £3,000. And don't think "I don't have time" - even if you're buying within 3mths you can gain. Full FAQs in Top 4% Help to Buy ISAs. | | | | | 3. |  FREE 50-page MSE First-Time Buyers' and Remortgaging Booklets. A mortgage is most people's biggest expenditure, and even if you've done it before, that doesn't mean it's the same this time around. My fully updated guides take you through it step-by-step.
- First-Timers' Booklet 2016: Download instant PDF | Order printed
- Remortgage Booklet 2016: Download instant PDF | Order printed
Many of you give us great feedback, as Haruka tweeted: "Just applied for 2yr 1.69% fix. Thanx for the Remortgage Guide. Really useful." | | | | | 4. | Find YOUR cheapest mortgage, with our best-buy comparison tool. We include all mortgages available to brokers, plus the direct-only deals too. | | | | | | Mortgage Best Buys
First-Time Buyers' Comparison Tool
Remortgaging Best-Buy Comparison Tool
(also see our Moving Home tool) | | | | | | Not as suggestions, but just to show the type of thing available, here are a few examples, on a £200,000 property on a 25-year term (as at 2pm Tue 12 April). Yet search your own for what suits you and do a proper comparison.
- 2-year no-fee fix at 90% LTV (10% deposit): 2.74%, no fee
- 2-year fix 60% LTV (40% deposit): 1.14% + £1,680 fee
- 2-year tracker 95% LTV (5% deposit): 3.99% + £35 fee
- 5-year no-fee fix 60% LTV (40% deposit): 2.29%, no fee | | | | | 5. | Don't just focus on rate - fees can cost you. The smaller your mortgage (especially if sub-£100k), the bigger the impact of fees.
The way to assess it is to spread the cost of the fees over the fixed or tracker period (as after you may shift deal). To help, the MSE Total Cost Assessment in our best-buys comparison does it for you. | | | | | 6. | Should I get a fix or tracker? With a fix, the amount you repay is, er, fixed - it's a bit like an insurance policy against rate rises. You usually pay extra for it, though right now they're only a smidgeon more.
With tracker deals rates move with UK interest rates, as do variable rates, though they can also move at a provider's whim.
Predicting interest rate moves is a tough game, so instead focus on your own finances. The more crucial the surety of knowing the cost, the more you should hedge towards fixing, and fixing longer. If a rock-bottom deal's your focus, hedge towards short-term trackers. Full help in Should I fix? | | | | | 7. | Mortgage brokers can help boost acceptance. You can, and often should, use a broker to help find the right deal. This isn't just for those who don't know what they're doing.
Brokers often have access to info unavailable to consumers, eg, lenders' credit and affordability criteria, so a good broker can ease acceptance by matching you to the right deal - and the application process is quicker. Some are fee-free on the phone (they get commission) but if you want face-to-face you'll usually pay. See Top mortgage brokers. | | | | | 8. | Yet brokers miss some mortgages... A few lenders, incl First Direct, Yorkshire Bank & Tesco, cut brokers out and sell only directly to the public. So some brokers can and do exclude them - we suggest you use a broker in conjunction with our mortgage comparison, which has all these deals. | | | | | 9. | Is your credit score good enough? If it's not it can kill your chances of getting a mortgage or just mean you pay more. Whether you're a first-time buyer or remortgaging, managing your creditworthiness before application (preferably many months before) is very important. For what to do see my 35 tips to boost your credit score. | | | | | 10. | The dreaded affordability check... try to minimise outgoings at least 3mths ahead. These days lenders have to stress-test if your mortgage would be affordable if rates hit 6-7%. They will want evidence of income, big bills, expenses, even eating out. So being frugal in advance helps.
Now in general I am a fan of these checks for first-time buyers, as they ensure people don't overstretch their finances.
Yet if you're remortgaging, not borrowing any more, and your circumstances haven't changed, these tests now apply to you too. And ridiculously that means people are effectively being rejected and told "you can't afford a cheaper deal". As mcrhyshammer tweeted us: "Circs hadn't changed. No missed payments. £90k equity. Yet no one'd give us a mortgage."
If this has happened to you, do tweet me. I'm campaigning for this to change, so see my EU rules could create mortgage prisoners blog. | | | | | 11. | You can get a Help to Buy mortgage, but the big scheme is mostly irrelevant to you. That much talked-about Help to Buy scheme allows people to buy a home with just a 5% deposit (95% LTV), but what's actually happening is the Govt is giving LENDERS help so they can offer more of these mortgages. That has worked, but when choosing a mortgage, whether it's Help to Buy or not is irrelevant to you.
The Help to Buy equity loan scheme is different: it's only for new builds and here, the Govt will lend you up to 20% (40% in London) interest-free for 5 years. There's also the Armed Forces Help to Buy.
Other schemes include shared ownership, which lets first-time buyers buy a share in the property, and rent the rest, and Social HomeBuy, which lets you own a share of rented social housing. | | | | 12. | Use your savings to get a cheaper mortgage. At every 5% LTV threshold from 95% down to 60% (for first-timers, every 5% bigger the deposit up to 40%), mortgage deals get cheaper. So if you've cash that can get you over a threshold, it's often a big winner. The big impact is pushing from a 5% to a 10% deposit...
Imagine you've a £14,000 deposit for a £150,000 home, and want a £137,000 remortgage. That's a 9% deposit, and the top 5yr fix is 4.49%. Yet if you could wait or find an extra £1,100 to get over 10%, the top 5yr fix is 2.84%, saving £1,420/year.
More info on remortgaging in Should I overpay my mortgage?, and use the mortgage overpayment calc. | | | | 13. | Don't fall for the hard-sell on mortgage extras. Lenders & brokers may try to flog you various insurance products with the mortgage. Yet you can usually do it cheaper elsewhere - see our Cheap Mortgage Life Insurance, Home Insurance and Mortgage PPI guides for full help. | | |
| | | | | | | | | | | | | | | | | | If you need to borrow, now FIVE cards offer 0% for at least 25mths, so there's a greater range of options
Done right, 0% credit cards are by far the cheapest way to borrow for a planned, budgeted-for purchase (eg, new sofa, car insurance). The danger is when they're used willy-nilly to fill unaffordable gaps in your income. And this week two new cards mean five are now 25+ mths - a year ago the longest was just 20mths. As different lenders have different criteria that may mean you've better odds of acceptance (our pre-application eligibility calc shows your odds for all five cards). | Top new-cardholder 0% spending credit cards PROTECT YOUR CREDIT SCORE: Find the card you're most likely to get with our 0% eligibility CALC | | | | Card | Purchase deal | Rep APR after (1) | | Post Office* - longest 0% card | 27mths 0% (2) | 18.9% | | New. The AA* / Clydesdale* - next longest 0%s | 26mths 0% | 18.9% | | New. Barclaycard* - another long 0% | 25mths 0% | 21.9% | | Sainsbury's Bank - longest 0% with rewards (Nectar pts on spending) (3) | 25mths 0% | 18.9% | | Virgin Money* - longest 0% on spending AND shifted debts (4) | 24mths 0% | 18.9% | | Tesco* - long 0% with Tesco points on spending (3) | 21mths 0% | 18.9% | | Aqua* - longest 0% for poor credit scorers (pls read safety warnings) | 4mths 0% | 34.9% | | (1) Only 51% of accepted applicants need get this rate. (2) You must spend in first 3mths (or it's 16mths 0%). (3) Not in eligibility calc. (4) Balance transfer fee 1% of amount transferred. Full info: 0% Cards & APR Examples. |
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Tip 1: Find which you're most likely to get. Applying leaves a mark on your credit file, even if you're rejected. Our 0% eligibility calc lets you home in on the cards you've best odds of getting, protecting your credit file. -
Tip 2: Fix your repayments to clear it within the 0% time. If you're doing a big one-off payment and effectively using this as a 0% loan, then best practice is simply divide what you borrow by the 0% months and repay that by direct debit or standing order. Eg, spend £3,000 on the card & if you've 27mths 0%, repay a fixed £112 a month. -
0% Spending Card Golden Rules. Full help & best buys: read 0% Spending Cards (APR Examples), in brief:
a) Never miss paying at least the monthly min, or you can lose the 0% (and always stick within credit limit).
b) Plan to clear the card before the 0% ends (or do a balance transfer) or the rate jumps to the rep APR.
c) These cards are usually ONLY cheap for spending, not balance transfers or cash withdrawals - so avoid. | | | | | This Thurs - the CHEAPEST time to book millions of Easyjet seats? It happens five times a year - and this is the booking time for Christmas tickets. Easyjet tricks
'Free' £13 Amazon trick. If you haven't bought a gift card from it in past 2 years. See our Amazon 'free' £13 blog.
'I made £23 PROFIT buying contents insurance' - can you beat it? Last week our 2016 home insurance record-cost was £3, then Ian's emailed to trump it: "Paid £32 and have £55 cashback confirmed, so I should have £23 profit", getting closer to our all-time '£67 profit' record. Can you beat it? It's done by following our full Cheap Home Insurance system. Tips include combining comparison sites Confused*, CTM, Gocompare* & MoneySup* for max range, then checking promos like £75 M&S via Together Mutual or a Vax steamer with Churchill, plus missed firms Aviva* and Direct Line*. After, see if cashback is available.
Ralph Lauren FLASH 20% off code. MSE Blagged. Also gets free del (norm £10). Thu-Fri. Ralph Lauren code
Santander 123 now pays 3% TAX-FREE - is the fee worth it? Martin's updated analysis: San 123 worth it?
Get PAID to walk (again) via fitness tracker or app. No catch, you get rewarded for your steps and more for the gym. Last week we told you of an extra bonus - and its site struggled with overdemand, so that's been extended until this Fri. Get paid to walk | | | | | | | | | | | The new tax year means a host of new savings allowances for children - here's how to take advantage
The aim is to ensure under-18s' savings earn as much as possible. The fringe benefit is, if your children are old enough, you get to give a great financial education lesson by going through the process of choosing and opening the account with them. As Martin says, ensure you explain "interest is the cost of money - so, when you save in a bank you're actually lending it your money, and it should pay you for that. The higher the interest, the more you're being paid." -
 Earn 6% on children's savings. The top payer is the Halifax 6% Kids' Regular Saver if you put in £10-£100 per month. For lump sums, HSBC MySavings pays 3% up to £3,000; Nationwide is 3% up to £50,000 but with only one annual penalty-free withdrawal. If they're 11+, Santander 123 Mini pays 3% on £300-£2,000 and gives a debit card, or for 7+ Halifax 2.25% Young Saver has an ATM card. Full info in Top Kids' Savings.
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Top junior ISAs (JISAs) and Child Trust Funds (CTFs). Junior ISAs are always tax-free, and every child under 18 has had a new £4,080 allowance since 6 April. The money is locked away until their 18th birthday.
Children aged 5-13 likely have Child Trust Funds (CTFs), which work just like junior ISA (JISA) savings, but the top ones pay less. As you can now transfer CTFs into JISAs, you may as well. The top-paying JISAs are Coventry BS and Nationwide at 3.25% AER variable. Full info, incl how to transfer, in Top Junior ISAs & Top CTFs. -
Aren't kids' savings tax-free anyway? Technically, no - in practice, yes. Kids pay tax just like everyone else. And like everyone else, if they've no work income, this tax year they can earn £17,000 from savings before paying tax (that's the £11,000 personal allowance + £5,000 starting savings allowance + the new £1,000 personal savings allowance (PSA)).
So what's the point of junior ISAs? There's one special case: if your child earns over £100/yr in interest from money given specifically by a parent/step-parent (not grandparents, uncles etc), the interest is taxed at the parent's rate. Now this is only an issue if the parent is earning over the new PSA themselves - but if that is the case, then putting money in junior ISAs or NS&I children's bonds keeps it tax-free. Full info in Kids' savings tax. | | | | | | | | | They can get this email free every week | | | | | | | | | The 'Rent a Room' allowance has jumped to £7,500 - so here's how to use it, and other ways to rent out your home
OK, a slightly saucy headline, but for a good cause. Your home is a valuable asset, and there are ways to utilise it to its full extent. Here are five ways to make it work for you, including our new Airbnb Renting guide. -
 New £7,500 lodger allowance. On 6 April, the amount you can earn tax-free letting a spare room rose from £4,250/yr to £7,500 under the Govt's Rent a Room scheme. A huge potential boon - for full help & to see if it's right for you, see Rent a Room. -
21 Airbnb tips for temporarily renting out a room or your whole home. Airbnb and similar sites link owners with travellers hunting for a short-term place to stay - whether for holidays or events such as Wimbledon. As James tweets: "We make £400/mth from our spare bedroom in Gloucestershire. It's great fun too." Even if you're renting out a room for holiday stays (not the whole home), you get the £7,500 rent-a-room allowance too. See 21 Airbnb tips for renting out your room. -
Warning - does your home insurance allow it? Many don't cover room or property letting. Not only does this risk no cover if your home is trashed, it may also invalidate your cover even after guests have left. So speak to your insurer - if not, we've a list of brokers who can help. See Rent a room home insurance. -
Rent out your driveway for up to £200/mth. Live near a city centre, airport, train station or footie ground? You could rake in up to £200/mth, as StevenDr does: "I rent my parking space out for £50/mth to an estate agent - the cash comes in useful." For the best ways to do this, see Renting out your parking space. -
Rent out storage space. Specialist rent storage space sites let you rent out unused attic, garage or spare-room space. Eg, a 20 sq ft loft space in south London could net you £600/yr. -
Rent out your home as a film set. If you have the right type of home, online film-location agencies let you list your property for free and take a commission if a crew books it. See Rent out your home as a film set. For more ways to earn extra cash, see Boost Your Income, Make Money Online, eBay Selling & Facebook Selling. | | | | | '£15' Daily Mail holidays are back (though really min £40). Collect vouchers & use at 150+ UK holiday parks. See our full '£15' Daily Mail hols guide.
Free £10 Neal's Yard hand cream with £4 mag. 50ml full-size in choice of three scents. Mag freebies
SUCCESS OF THE WEEK: (Send us yours on this or any topic)
"Thanks @MartinSLewis, your email about saving on car insurance quotes just saved me £500."
Don't just accept the first quote you're given - follow our Car insurance cost-cutting system to save big.
£10 for 3mths' Sky Movies with Now TV. MSE Blagged. Newbies only, norm £9.99/mth. Cheap movie streaming
2for1 for £1ish at Thorpe Park & The Dungeons. Valid all summer. We spill the beans in Merlin deals. | | | | | | | | | | Should all tax returns be made public? Whose tax returns do you think should be public?
Shhhhhhh - don't shut our libraries... said the overwhelming majority of the 29,856 who voted in our poll. Of these, 90% think a library is a crucial part of the community, even though 17% never visit one. Under-25s were most likely to say libraries are less important - 22% said they're not the best use of public money. | | | | | | | | | | | | | | | | | | | | | | | | | | | Thu 14 Apr - Good Morning Britain, ITV, Deals of the Week, 7.40am. Read previous
Fri 15 Apr - This Morning, ITV, Martin's Quick Deals, from 10.30am. Watch previous
Mon 18 Apr - This Morning, ITV, Money Monday, from 10.30am. Watch previous
Mon 18 Apr - BBC Radio 5 Live, Lunch Money Martin, 12noon. Subscribe to podcast | | | | Thu 14 Apr - BBC Radio Manchester, 4.20pm
Tue 19 Apr - BBC Radio Cambridgeshire, 11.20am
| | | | | | | Q. My mum-in-law has received her PPI refund offer from the bank but the interest included is taxed. Will it be tax-free under the new personal savings allowance? Kyle, via Twitter. MSE Sam Mc's A: It's a good question, and one I had to go back and forth over with HM Revenue and Customs (HMRC) for 10 days to confirm. The answer (eventually) is yes - but you'll still have to do a bit of work to get it tax-free. HMRC told us that all compensation interest (under which PPI refund interest falls) will be included under the personal savings allowance (PSA). However, in an unusual quirk, it will continue to be paid to the customer with tax deducted (unlike ordinary savings interest which will now be paid gross). This means that if your mum-in-law is not liable to pay the tax on any compensation interest she receives (whether it's because she hasn't used up her full PSA or because she's a non-taxpayer) she'll still have to claim the tax back by filling in form R40 (or form R43 if living overseas) and sending it to HMRC. Everyone who's ever had a loan, credit or store card, catalogue account or car finance in the past 10 years should check NOW if they were flogged worthless PPI - and if you were rejected before and didn't go to the Ombudsman, try again. You can easily reclaim £1,000s for free yourself - see our PPI Reclaiming guide for how to do it. Please suggest a question of the week (we can't reply to individual emails). | | | | | | | That's it for this week, but before we go, last week Sweden became the first country to set up its very own telephone number, which you can phone to speak to a "random Swede". So we put in a call - the cheap way, of course - and asked Gorm in Stockholm for Sweden's top MoneySaving tip... We hope you save some money,
Martin & the MSE team | | | | | | |
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