Just like your health, it is important to regularly check up on your home loan to ensure that it
is working for you to achieve your goals. If you don’t review your home loan you may be
paying too much in interest or you may not be using the interest saving features of the loan to
their full benefit.
It doesn’t matter if you’ve had your home loan for one or 10 years, it can be extremely beneficial for you to do regular check-ups on your mortgage. So, what signs should you look out for?
When the interest rates change
Generally, when the RBA changes the cash rate, it prompts borrowers to check in on what their current interest rates is and look around at what is on offer. However, the RBA has kept the cash rate on hold for the last 19 months but this hasn’t stopped most lenders changing their rates out of cycle.
There are some really attractive rates being offered at the moment, both in the variable & fixed space. So why be complacent with your current lender? Why not give us a call to review your current rates.
The fixed period is nearly over
This is the perfect time to review your home loan as your repayments are most likely going to change. Usually when the fixed period ends, the interest rate reverts to the standard variable rate which may not be as competitive as the fixed rate you initially secured. It is the perfect time to shop around to see what variable rates are on offer and compare then with the variable rate that your loan is reverting to.
Interest only period due to expire
Most lenders will restrict your interest only period to a certain number of years and not the full term of the loan. If it is an investment property you may want to continue interest only past this time. When you are coming up to th expiry, contact your existing lender to see if they will extend it, if not you probably need to refinance to continue on an interest only basis. It is a great opportunity to see what rates are available that could save you interest and increase the return on your investment.
Using your home loan to consolidate debt
Do you have too many other debts?
If you find that you are struggling to meet multiple repayments on other debts, such as a personal loans and credit cards, you may be able to save money on interest by consolidating your debt into your home loan. This way, you will only have to worry about one repayment and if you fast track getting it paid off, you may save on interest as well.
Haven’t checked the loan in a number of years
It is easy to become complacent with your home loan and just let the repayments regularly come out of your account. From time to time new lenders enter the market, existing lenders release new home loan products or there are special offers to attract new business. By keeping an eye on the market you will know if your home loan is competitive and may snag a super deal. At the very least, you should try to review your home loan every 2 years.
Your circumstances have changed
If your income increases or your expenses reduce, it might give you extra motivation to see how quickly you can pay off your home loan. Combining paying extra with securing a lower rate could see the time it takes to pay off your home loan reduce by a number of years.
You may find that there are other options available that are more flexible, with a lower interest rate and interest savings features like an offset account to deposit your extra savings.
If you want to keep your finances healthy, then you need to regularly check up on your financial commitments
and keep an eye out for any signs that may indicate they need a check-up. Also, chat with an expert who has an understanding across the entire home loan market.
Did you know that JR Mortgage Broker & Finance has access to 40+ lenders on our lending panel. Whoever your current lender is, we can see how it stacks up against other lenders.
Call Julie on 0417 749006, John on 0409 497202 or leave your details here and I will give you a call.
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