Three tips for saving cash on your mortgage payments

A mortgage tends to be one of the most costly things a person will ever pay for - so it is no surprise that so many people are keen to save money on it.

There is always a great deal of competition between mortgage suppliers - all claiming to offer the cheapest arrangement - yet it can be very hard to know which option will save you money, particularly when external circumstances will often dictate whether or not your decision will land you with a saving or additional costs.

But consumers should not respond to this oft-complex choice by burying their heads in the sand and simply picking the first home loan offered to them, as there are ways of saving money on a mortgage. Here are three potential ways in which to cut your property outgoings:

Fixed or tracker?

As a mortgage applicant, one of your most basic decisions will be whether to opt for a fixed-rate mortgage (one that stays at a certain rate throughout the specified term) or a tracker (a deal that will track a figure - usually the Bank of England base rate - by a certain amount).

At its heart, the question is whether you think overall lending costs are likely to go up during the term of your mortgage - if you think they will rise significantly then a low fixed-rate option may be best, whereas a tracker is often better if you are convinced the rate will stay as it is or go down.

But you need not rely on our own investment speculation knowledge for this - a meeting with an independent financial adviser should allow you to gauge the mood and make an informed decision about which is likely to be cheaper.

Previous mis-selling

In some cases, a person may be able to make a mis-sold mortgage claim. While it does not reduce the cost of your current deal, you can use the compensation to take off your current payments. There are a number of examples of mis-selling that may warrant a claim, for example, if you were sold a sub-prime deal without being in arrears.

A Financial Services Authority investigation in 2008 has meant that people who have taken out a mortgage since November 2004 may be able to put in a claim if their circumstances fit.

Specialist and temporary deals

There are a wide variety of more specialist mortgage arrangements - such as offset mortgages - that may suit certain types of borrowers and discount deals that generally benefit the majority. The problem is that a provider will generally withdraw or amend the terms of a product that starts to get a lot of interest, so the key is to be one of the first to it.

The only way of doing this is to keep your ear close to the ground; don't just wait for your mortgage end date before looking at alternative borrowing deals - always be on the lookout for terms that will save you money.