Changing your mortgage plan may very well be the best or worst decision you can ever make. If done well, it could relieve you of a lot of financial stress and help save you a large amount of money. This seems like such a big task, so we have broken it down and listed a few tips on how to get started!
First, understand your current situation. What are your scheduled payment amounts and how does that affect your budget? What type of mortgage do you have right now? Do you have an interest-only mortgage, a pension mortgage, an annuity mortgage, or a different type of mortgage? Most importantly would be the current interest rate you are paying. And all these factors can make a difference when changing mortgages and if that transition is for you. For example, with a standard variable rate (the rate you will be charged at the end of your fixed interest rate), switching can save a lot of money.
Second, make sure to do your own research and speak to multiple banks and mortgage brokers. Looking for a different mortgage is a lot like shopping, where you might not find the best deal at the first place you look. Shop around for the best mortgage plan that will fit your situation and see if switching will be worth it financially for you.
When looking around, do not eliminate options from banks other than your current bank. Even though switching from one bank to another will be more work, oftentimes it is worth the financial relief. Make sure to not limit yourself from getting a great mortgage plan!
A small detail to keep in mind when changing your mortgage would be the possible fees you may run into. Make sure to look at the total cost of changing mortgages and whether even with these possible extra fees, would you still be saving money in the long run? If so, switching mortgages may be the correct move for you, but if you will end up having to spend more money then it would be in your best interest to stay with your current mortgage plan.
In the end, the decision to switch mortgage depends on what money means to you and your personal financial situation. Make sure to talk with your bank and learn about all the options available to you. The switch will take time and effort but if done well, can be a huge relief to you and your family financially.