A mortgage is a very serious investment: you are paying off typically a six-figure sum over a period in the order of 25 or 30 years. That given, it is strange that so many people stay with their original mortgage for so long. The changes in interest rates and other factors that influence your monthly repayments mean that many people are paying thousands of pounds more than they need to. Few people would treat other investments in the same way. A quick mortgage comparison can highlight just how much it may be possible to save.

Probably the single biggest indicator of potential savings is the current interest rate. Depending on how long you have had your mortgage, this could have changed quite significantly over the years. If the interest rate has halved in the time since you got your first mortgage, you could be paying twice as much as you need to! Given the size of the average mortgage, this could be hundreds of pounds a month, or thousands over the course of every year. Often the only factor keeping people in their old mortgage is the thought of the trouble involved in changing. Given the limited hassle it will be in practice and the huge savings you could make, it could be worth thinking again. You are unlikely to make the same hourly rate for any other job!

Mortgage comparison: factors to consider
Although the interest rate is an important variable, make sure that the savings a lower rate will bring will not be outweighed by any exit fees on your current mortgage or arrangement fees on the new one (if any). In the long term, this is unlikely to be a problem. However, another factor is that the best deals are usually available to new customers, and revert to a standard rate after the introductory period – perhaps two or three years. This later rate can be a percent or so higher than the initial rate. Of course, so long as the arrangement/exit fees do not make it uneconomical, it could well be worth remortgaging again at the end of that period. Many people do – just because a mortgage is a long-term investment doesn’t mean you can’t move it to a better deal every few years.

If it has been some time since your original mortgage, you may have extra money to put in (especially if you have been working to the old budget and suddenly find yourself with spare cash thanks to the new deal). Some people remortgage and use the surplus to pay off capital more quickly, so that they can own their property outright sooner. If this is a position you are in, make sure that your new mortgage allows you to overpay and that there are no early repayment charges. Alternatively, if the new mortgage is an interest-only mortgage, you can put the extra money into the vehicle (such as an ISA) designed to pay off the capital at the end.