One of the common questions I hear often is: How do you choose the most beneficial mortgage and save money in the long term? This may be one of the most important financial decisions you’ll make in life, and it can impact your finances for many years to come.
Getting a mortgage isn’t just about choosing the right plan, but also understanding all the mechanisms and tools at your disposal. Let’s go through everything you need to know to get the best mortgage – and keep more money in your pocket.
How to determine the real amount you need?
First and foremost, it’s important to know how much money you truly need. Many people take out larger mortgages than they actually require, and there’s a price for that. Your mortgage should be based on your realistic budget, not just the value of the property you’re buying.
I recommend calculating your income, fixed expenses, and your ability to pay the monthly repayments without falling into financial distress. Remember – your mortgage should serve you, not become a burden.
Fixed or variable rate – what’s better?
Here comes one of the biggest dilemmas in choosing a mortgage: fixed or variable rate?
The fixed-rate option provides peace of mind. You know exactly how much you’ll pay each month throughout the mortgage period. This is suitable for those who prefer stability and financial certainty. The downside? Sometimes, the interest rate on a fixed plan will be higher compared to a variable one.
The variable-rate option, on the other hand, gives you the chance to benefit from lower interest rates at the beginning, but it may change later. That means your monthly payment could increase depending on interest rate changes in the economy.
So what’s best? It depends on your personal preference and the risk you’re willing to take. People seeking peace of mind will prefer the fixed-rate plan, while those looking for short-term savings may lean more toward the variable plan.
Don’t fear negotiations – it’s your money!
Many people are embarrassed or afraid to negotiate with banks, but when it comes to mortgages, every small percentage can save you thousands of shekels over time. Don’t be afraid to demand better terms and seek offers from different banks. Banks want you as customers, and you can use that to your advantage.
You can also consult with a professional mortgage advisor to guide you through the process and help you get the best terms, especially if you feel overwhelmed by all the information.
Understand the importance of mortgage refinancing
This is one of the most important tools for saving money in the long run – mortgage refinancing. If you started paying your mortgage a few years ago, the interest rate in the market today may be completely different. Therefore, you have the option to refinance – that is, change the terms of your mortgage, sometimes with improved conditions.
This can save you tens of thousands of shekels over time. It’s always worth keeping an eye on the market and checking if there’s an opportunity to improve your existing mortgage.
In conclusion – a smart mortgage is a profitable mortgage
Ultimately, choosing the right mortgage requires knowledge, understanding, and sometimes a bit of patience. Don’t rush into decisions without checking all the available options. With proper consultation, choosing a plan that fits your personal needs, and constantly monitoring the conditions, you can save tens of thousands of shekels and turn your mortgage into an efficient tool that lightens your load rather than adding to it.