Martin Lewis was back at the helm of his self-titled TV show on Tuesday night (July 11) to give viewers his latest advice on mortgages. The Money Saving Expert founder hosted a 'mortgage special' of his live ITV show, The Martin Lewis Money Show Live, which saw him tackle tough questions on the mortgage crisis.
As interest rates continue to rise, many homeowners are facing sky-high monthly repayments that are unaffordable amid the crippling cost of living crisis, where energy prices and other household bills are also soaring.
Whilst introducing the 'emergency' edition of his show, Martin told viewers that mortgage rates were now at a 15-year high. He said: "Today mortgage rates rose again. They are now higher than after the mini budget fiasco, higher than at any time since 2008.
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"Someone coming off a two-year fix now will likely see what they pay rise by £200 a month per £100,000 of mortgage debt. This is no accident, interest rates are being put up deliberately to squeeze borrowers," the 51-year-old warned.
After 13 consecutive interest rate rises made by the Bank of England, the average rate of a two-year fixed deal has now soared to 6.66 percent, according to Moneyfactscompare.co.uk.
Amongst his wealth of advice, Martin explained how concerned homeowners can find the cheapest mortgage deals right now.
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Introducing a three-step guide, he advised: "First of all get your current mortgage details and find out the rate, the type, when your fix ends if it is a fix, the term, how long your mortgage lasts and any early exit penalties for clearing it.
“Most importantly for everybody out there, you need to know when you will move to the standard variable rate. There are cheap variable rates and there is the standard variable rate.
"You don't want to be on an standard variable rate (SVR) if you possibly can, you want to get off that, so you need to know when you’re going to be moved to that.”
Martin then advised that a 'crucial' thing to know is your loan to value (LTV), which is the proportion of your home’s current value that you borrow, which is affected by house prices.
“The mortgage deal you can get tends to be cheaper the lower your LTV, so the less you’re borrowing,” he explained.
“It specifically tends to be around 90 percent, 80 percent and 75 percent until 60 percent, then it doesn’t get any cheaper.
"So if you are just above one of those thresholds and you happen to have any saving, then you want to push down that threshold if you can possibly can because you might get a cheaper rate.”
The financial expert then advised viewers to check their existing lender's 'product transfers'.
"It used to be expensive but lately they have offered competitive deals. It can mean less paperwork, fewer fees and they don't have to do affordability checks," said Martin.
After gathering all of your details and finding the benchmark from your existing lender, Martin then said it is time to start looking for the cheapest deals.
"Get yourself onto a comparison site super quick, but don't just focus on the rates, you've got to factor in whatever fees they are charging you for switching and spread that over however long the fixed term is," he advised.
"This is especially important on smaller mortgages where the fees have a disproportionate impact."
Answering a viewer's question on whether she should go for a two or five year fixed deal, Martin said: "Five years tend to be a little bit cheaper at the moment but maybe you'll lock in for two years now and then things will be cheaper and you can lock in again at a cheaper rate."
Want to feature your home in our Where I Live series? If so, please email your details to phoebe.jobling@reachplc.com.
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