For many homeowners, mortgage repayments eat an enormous chunk out of their monthly salaries. This can make life difficult when times are tight financially. As a general rule of thumb, experts often recommend that a mortgage repayment should constitute less than 30% of your income.

If you’re on a budget and looking to cut costs, your mortgage is an excellent place to start. Here are five top tips for lowering your monthly mortgage payments.

1.Extend your mortgage term

A simple way to take some strain off each month is to extend the length of your mortgage term. This means you will pay less each month, albeit for a more extended period. You generally won’t even have to refinance your mortgage to do this, as most lenders will offer you this option for a small fee. Bear in mind, this will mean you will amass additional interest over time, so you’ll be paying more overall. But as a short term solution to struggling finances, extending your term can help bear the load.

2. Refinance to a lower rate

One way to lower your monthly outgoings is by applying for a mortgage refinance to take advantage of a lower interest rate and reduced monthly payments. Your credit score will determine whether or not this is a possible option for you. Understanding mortgage rates can be complicated, but getting advice from a professional mortgage broker such as Altrua Financial can help you find the lowest rates.

3. Make a larger down payment

When you buy your home, the larger deposit you give, the less you will have to pay on your mortgage. Although you may be more out of pocket initially, paying a more substantial sum upfront means you will feel the financial benefit in the long run. Taking a bit more time to save up before buying a house can set you up well for the future.

4. Choose an interest-only mortgage

An interest-only mortgage is more complicated than the standard repayment mortgage, but it can save homeowners a heap of money. In the initial years of your mortgage repayment, you will only be paying the interest, and the more significant proportion of the balance can be paid later on when you are more financially secure.

5. Make one extra payment per year

It might seem counterintuitive to save money by spending money, but making an additional payment each year can be an effective way of saving money in the long term. Prepaying your mortgage with one extra instalment in addition to your regular payments can reduce the length of your loan by a few years. Factor in the interest you’ll be saving on your shorter mortgage length, and you’ll have an idea of how much money you could save.

If you want to reduce the pain of your monthly mortgage repayments, there is more than one way to do so. To decide the best option for you, weigh up the pros and cons of each option and work out which is the best solution for you before moving forward.