Switching lenders

By THIS IS MONEY
Updated:

 

I have a variable rate interest only mortgage with Abbey national but an considering changing to a Direct Line flexible mortgage so I can pay off my loan early. It looks good and will cost me nothing to change over as all fees are refundable on completion. Any advice about things like hidden pitfalls/ PM, London

Patrick Bunton at mortgage broker London and Country says: The interest rate on Direct Line flexible mortgages is currently 6.15%, and though it is calculated daily, you could achieve the same goal - paying off your loan early - more cheaply by picking a lower rate loan from the market as a whole and simply overpaying and/or shortening the term.

For this you'll need a repayment mortgage rather than an interest only deal like the one you have at present. If you have the capacity and discipline to overpay, simply choose the best deal you can find and do it yourself.

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