If you are looking to free up some cash in your monthly budget, reducing your mortgage repayments is a great way to start. Your mortgage repayments normally account for a large chunk of your salary, around 30-40%. There are a few ways to reduce this, depending on your situation.
Make a larger down payment
If you are able to, paying more upfront can reduce your monthly repayments. The more you put down, the lower your repayments will be and the less interest you will pay overall. Of course, this is only an option if you can financially afford to put down a large sum of money and still comfortably keep up with your other financial commitments (and have some savings spare for a rainy day).
Choose an offset product
If you have a large sum of money in your current account you can tie it to your mortgage with an offset product. This is a product that allows you to keep your cash capital available to you while offsetting the cash in your account against your mortgage payments, saving you from paying interest fees. If you withdraw money from your current account you will only be charged interest on the difference between your loan amount and the cash balance available in your current account.
Refinance your mortgage
Refinancing your mortgage at the right time can end up saving you thousands of Dirhams. Refinancing is often used to get better interest rates & negotiate other terms of your mortgage. Watch out for the upfront costs that are often involved in refinancing to see if it’s worth it for you! Want to learn more about refinancing your mortgage? You can find all the details in our ‘Should I refinance my mortgage’ blog post.
Not sure what is best for you?
Huspy and our team of in-house mortgage experts are here to help you answer any questions you have. We can help you find the right option for you and guide you through the process from start to finish.