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Mortgages

Borrowers look to early repayments, lodgers and extra work to beat mortgage rises

Nick Cheek
Written By:
Nick Cheek
Posted:
Updated:
19/12/2022

Almost half (45%) of homeowners have already paid an early repayment charge (ERC) to exit their current mortgage deal and secure a better rate or are thinking of doing so.

According to a survey of 2,000 homeowners conducted by The Mortgage Lender (TML), ERCs are just one of the ways people are coping with rising mortgage and living costs. 

Within the share of people considering paying an ERC, 7% said they had already done so in order to get a new fixed rate. Some 13% said they plan to pay an ERC, while a quarter are still considering it as an option. 

TML warned that this could mean fixing onto a rate which is higher than necessary, as pricing is slowly falling and set to keep declining in the next few years. 

Lodgers, downsizing and extra work on the table

A tenth of respondents said they had taken on extra work to afford rising costs and 7% said they now had a lodger to help with payments. 

A further 10% said they will downsize to reduce costs while a fifth said they were considering this option. Nearly a quarter (24%)  revealed they were considering selling up completely and renting instead. 

Seeking advice from a mortgage broker seemed to be of importance to respondents, as 13% said they had already consulted an adviser while 27% will be doing this and a quarter are considering it. 

Steve Griffiths, head of sales at The Mortgage Lender, said: “It can’t be denied that the cost of living and rising costs are starting to bite, so it’s not surprising that borrowers are looking for ways to save their money. What’s vital is that they seek advice from a professional before making any changes. Encouragingly, we are seeing many people speaking to their brokers or planning to do so.  

“Brokers play a pivotal role in supporting consumers make one of the biggest financial decisions in their lives and can help navigate the market to find the best possible deals that suit individual circumstances and factor in true costs.”