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Derin Clark

Derin Clark

Online Reporter
Published: 02/09/2019

With schools reopening this week and children heading off to start a new term, it provides parents with the perfect opportunity to take time out to re-evaluate and improve their finances.

In fact, taking just a few hours to look at current finances and debts owed could help parents, as well as consumers in general, to not only feel more in control of their finances but also help to reduce their monthly outgoings.

Reduce monthly remortgage repayments

One of the biggest expenditures most families face is mortgage repayments, but for those who have come to the end of their mortgage term, now is a great time to remortgage as rates are currently at a competitive low. Rachel Springall, finance expert at, said: “One way to reduce essential outgoings would be to remortgage, and next month there is an expected surge in the number of people remortgaging. Indeed, back in October 2017 the average two-year fixed rate plummeted to a record low of 2.21%, so those borrowers who took advantage will now revert onto a standard variable rate (SVR) that could potentially see their monthly repayments double. In fact, the average SVR today is 4.89% compared to the average two-year fixed rate today of 2.47%.

“Borrowers may also be concerned about economic uncertainties and are looking to fix for longer. Thankfully, there have been significant cuts to deals in the five-year fixed market, as well as more deals surfacing for even longer terms, such as 10-year and 15-year fixed deals. All in all, borrowers have plenty of choice, but seeking independent financial advice may be wise to navigate the mortgage minefield.”

Consider an interest-free credit card

The summer holidays can be an expensive time for parents who either have to find extra money to cover childcare costs or spend more on ensuring their children are entertained during the six-week break. As such, it can be easy to put the extra costs on credit cards, but this can lead to parents being faced with hefty credit card bills. One way to help pay off the balance faster is to move credit card debt to an interest-free balance transfer credit card. Springall comments: “Turning to a credit card to help cover expenses is convenient to do, but it can cost. This is why consumers should consider shifting their debts to an interest-free balance transfer card to avoid incurring interest charges. According to The Money Charity, the average credit card debt per household is £2,625 and if a borrower only paid the minimum repayment per month, it would take them over 26 years to pay it off.

“MBNA is currently offering one of the longest offers, which has a 29-month interest-free deal on balance transfers for a fee of 2.75%. This may not be the best choice for some borrowers though, as they could instead apply for a fee-free deal, such as the 23-month 0% balance transfer offer from NatWest.”

Consolidate debts

Alternatively, for those with debts on various credit cards, a low-cost unsecured loan could prove a better option. Springall added: “Sometimes debts can get out of hand or there are too many credit cards open with various balances, so it would be wise for consumers to consider an unsecured personal loan to tackle their debts. Loan rates are much lower than a few years ago – today the lowest rate on offer on a £10,000 loan over five years is 2.9% from a few lenders, including John Lewis Financial Services, whereas five years ago the lowest rate for the equivalent amount and term was 4.1% from Sainsbury’s Bank. It’s important to keep in mind that out of all successful applicants, a minimum of 51% must be offered the advertised rate, and that early repayment charges may apply if customers do switch their loan.”


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