Mortgage is one of the more important items in your finances as it is about a lot of money. Usually it is quite a lot of money and for a long time, so there are quite a lot of opportunities to influence and save money. In the same way, it can also be unnecessarily expensive if you do not care or are familiar.
Since very many people have mortgages and that it is such a huge cost, it is not stupid to have a small guide with tips for different things to think about. This quick guide covers tips to help you keep costs down, making it easier to manage your mortgage and making life a little easier in general.
Always negotiate and bargain on your mortgage
A good rule is to always try to bargain on your mortgage. If you are thinking about tying your loan, you have the opportunity to negotiate with different banks to get a competitive interest rate. If you instead run on variable interest rates, you can sometimes talk to the bank and compare with other banks to see if you can find a better mortgage rate.
The best tip for negotiating a good interest rate is, first, not to be afraid to bargain. It is almost a bit like when you are on holiday in Turkey and have to buy something from the street vendors – they expect you to bargain and it almost always goes. The better you are as a customer the easier it is to get a good mortgage rate. If you show what benefits you have with your finances and why you should get a low interest rate, it usually works well.
You can simply look around among different banks and find out what interest rate they offer. If you then go to your bank and say that you can get a better interest rate at another bank then this can give them some fire in the back so that they lower your interest rate. Also, if they refuse to interfere, you should not be afraid to actually move your mortgage to a lender that offers good interest rates.
Variable interest rate vs fixed interest rate
Should one choose variable or fixed interest rates on their mortgage? It is always up to you, but the simple answer is that, historically, the variable interest rate has been cheaper and that it is usually a slightly cheaper alternative. Fixed interest rates are a little safer and it also means that you know exactly how much you pay for your mortgage every month. You have to pay a little more to have this security, but of course it sometimes suits to have a fixed mortgage rate.
If you choose a variable interest rate, you should save some extra money to afford higher costs if the interest rate goes up further. You should always have a buffer so that it does not suddenly become so expensive that you do not have enough money.
Bind only part of their mortgage
You can, if you want to borrow part of your mortgage and leave another part with variable interest rates, and you can also choose to tie up your loan with different long maturity. The advantage of tying up different or just a part is that you spread the risk a bit. For example, you can partially enjoy the slightly longer interest rate you get with variable interest rates and partly have a little more security by tying up part of the loan.
The disadvantage of having different bonding times is that it becomes more difficult when negotiating lower interest rates. Since the best weapon you have is to threaten to change bank, it becomes a bit silly when you tie up your loan with different bonding times, because you can not change bank as easily.
Keep track of the repo rate
The repo rate / key rate is a very important component when it comes to the banks’ mortgage rates. A low repo rate often means a low mortgage rate and vice versa. It is therefore good to keep track of how interest rates look in Sweden. If you know what applies and follow the development of the interest rate situation and can see a bit ahead in time, you can often draw many good conclusions about how the mortgage rates will be going forward.
If you have control of this, it is easier to decide if you want to tie up your loan or drive on a mobile and it is also easier to decide when you have the opportunity to bargain etc. You can also use these skills to see if you need to save a little extra for the future and get ready for higher interest rates and higher costs.