Mortgages

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By Sarah Modlock

We are expected to spend an incredible £615 each this Christmas on gifts, food and drink and entertainment. However, with many people having to use credit cards to help pay for the festive season the financial hangover could last well into the New Year. To help avoid the January blues this year, Bradford & Bingley urges homeowners to offset the cost by remortgaging onto a competitive deal.

This is not about using a new mortgage to borrow money, so we are not talking about taking on more debt. In fact it's all about saving money by getting a better deal on your biggest monthly expense. Homeowners currently languishing on their lender's standard variable rate could save around £150 a month – £1,800 a year – by moving onto a market-leading deal (based on a 100k mortgage), more than compensating for the festive flurry.

'Moving from your lender's standard variable rate onto a competitive deal is advisable at any time, provided any early repayment charges do not make it uneconomic to do so,' explains Duncan Pownall, mortgage development manager for Bradford & Bingley. 'However,' he adds, 'around Christmas time, with all the associated expenses, it makes perfect sense. That way you really can have a happy New Year without the usual financial headache.

Homeowners are three times more likely to shop around for car insurance than think about how to switch to a better deal on their biggest financial commitment, according to the Department of Trade and Industry. 'The British are throwing money down the drain by not reviewing their mortgage,' says Gina Collman of lender GMAC-RFC. 'Just because a mortgage seemed a good deal when you took it out does not mean it still is now. New rates and deals are becoming available all the time. Why pay more than you need to in interest when there are much better rates available?,' she adds.

The range of exclusive remortgage deals just launched by Bradford and Bingley are designed to meet different customer needs and include fixed and variable rate offers but all with attractive cashbacks. Homebuyers can save the money, make home improvements or pay off their festive debts.

Bradford & Bingley's new range of competitive remortgage products

Type	Rate	Cashback	Lender Fees	Notes
Discount – funded by Bank of Ireland	6.29% (SVR –0.3%) until 28.02.09. Follow-on rate 6.59% (SVR) 6.7% APR	4% paid on completion	No arrangement fee Early Repayment Charges (ERC): 3% until 28.02.09	Free valuation fee and free legals. ERC free payments: 10% p.a. Max LTV: 95% to £200k, 90% to £450k, Higher Lending Charge (HLC): free to 85%
Fixed – funded by Coventry Building Society	5.90% until 31.12.10. Follow-on rate 5.25% (BBR + 0.75%) 5.8% APR	5%	£350 arrangement fee ERC: 4.75% until 31.12.08 then 2.75% to 31.12.10	Free valuation fee and free legals. ERC free payments: 5% p.a. Max LTV: 90%, HLC: none
Fixed – funded by Coventry Building Society	5.09% until 31.12.10. Follow-on rate 5.25% (BBR + 0.75%) 5.5% APR	1%	£350 arrangement fee ERC: 3.75% to 31.12.08, 2.75% to 31.12.10	Free valuation and free legals. ERC free payments: 5% p.a. Max LTV: 95%, HLC: none.

B&B credit broker fee: £199 flat rate fee (no fee online).