How A Mortgage Broker Can Help You Through The Cost Of Living Crisis

Although the UK Government recently announced a price cap of £2,500 a year for energy bills to stop them from spiralling out of control, we’re still in the thick of a cost-of-living crisis, and many households could use extra support.

These are times of great financial uncertainty, but if you’re a homeowner or planning to buy a home in the near future, the right mortgage broker could be the difference between saving precious pennies and paying even more over the odds.

How a broker can help you with debt

The cost of living crisis, fuelled by price inflation, is adding more and more pressure onto monthly outgoings, most of which include some form of debt; mortgages, personal loans, credit cards etc.

With the help of an experienced broker, there’s a few things you could consider to reduce your overall debt burden.

Debt consolidation

Rather than having multiple debt commitments to pay off each month, your broker could help you look at ways to consolidate all of these into one, manageable payment. Most importantly, depending on how you restructure this debt the new payments could be much cheaper, so you’ll be saving money at the same time.

If you’re a homeowner, a classic way to do this is by releasing the equity held within your property to cover the full repayment of all your outstanding debts. There’s basically three ways you can do this:

• Remortgaging your existing home loan
• Use an equity release scheme (if you’re aged 55 and over)
• Take out a secured loan (also known as a second charge mortgage)

Your mortgage broker will be able to help you consider all of these options in detail and make sure the choice you make is the right one for your circumstances. They will then identify the best lenders offering the deal able to make the most savings on your monthly repayments.

How they can help you cut costs

At a time when belts need to be tightened, scrutinising all of your regular monthly payments and highlighting which ones are either not essential or could potentially be reduced is sound financial planning. Payments such as:

• Mortgage
• Insurance policies
• Mobile phones
• Media subscriptions (Sky, Netflix etc.)

All of the above can be renegotiated in some shape or form, with the overall aim to reduce the amount you pay each month.

In the case of both mortgages and insurance – more specifically, home, life and critical illness insurance – a broker would be best placed to help you find a range of different options available across the market. For mortgages, they’d be able to outline what other lenders can offer and assess whether remortgaging could save you money on your repayments.

For your insurance, they’d be able to compare all the provider’s packages to see which one offers the same cover but for a lower premium. In addition, a broker would also help you find alternatives that can offer reduced rates and avoid unnecessary fees – all of which helps with the overall objective here of cutting your costs down as much as possible.

Downsizing

If the worst comes to the worst and you feel the best way to cope with the current situation is to downsize, then the brokers we work with would be able to help you find the best possible new mortgage for your next property purchase.

They’ll not only be able to source the right lenders but also the most suitable terms and help you through the application process from start to finish.

How they can protect you against further interest rate rises

The surge in energy prices has put inflation on track to reach levels not seen in the U.K for fifty years, with some market analysts estimating an inflation rate of 18% by the end of 2023. As a result, the Bank Of England (BofE) is expected to pursue its current policy of increasing base rates to curb spiralling price rises.

If you’re concerned about how this could affect you and your own mortgage repayments, now is a good time to sit down with a broker and discuss what changes you could make to the type of home loan you have currently, such as:

• Long term fixed-rate mortgages
• Tracker mortgages
• Discount mortgages

Of the above, remortgaging onto a long-term fixed-rate deal will certainly give you the peace of mind of knowing how much your monthly payments are going to be and that they won’t change, regardless of what happens to the BofE base rate. Tracker and discount mortgages may be viewed as slightly bolder moves right now but should be better placed to benefit from rate reductions when they eventually come.

Your mortgage broker will be able to outline all of the options available to you from across the entire market, so you can make an informed choice based on what you feel is best for your own situation. If you make an enquiry, we can match you with a broker we work with who has experience in this area and ask them to contact you straight away.