With Interest rates currently sitting at historic lows, if you haven’t reviewed your loan, you could be in danger of paying too much for your loan.
Getting a better deal on your loan.
We find it a huge surprise when a client comes to us with no idea of their current loan rate. That being said, we understand– once you successfully settle your home loan, the repayments become a ‘set-and-forget’ process, as you are generally able to afford them and it is easy for life to carry on going by without you needing to think about your rate.
However, this strategy is a great way to cost yourself thousands of dollars a year by not refinancing your loan. Why? Because every borrowers situation changes over time. As does the lending lending landscape thanks to fluctuations and stiff competition between lenders. If you’ve waited any longer than 6 months to get a health check on your loan, you may be paying far too much.
If you are unsure if you should refinance, we have listed a few reasons why people refinance below.
Life always changes
If you have had a home loan for a few years now, it’s safe to assume your life has changed in that time. You may have started a new job, received a promotion, or gone through significant life changes such as getting married or had your first child.
You might even be near the end of a fixed rate term or interest only period so now is a great time to find out what your options are.
Refinancing will allow you to ensure your home loan is still in line with your needs and goals.
You want to pay off your loan faster
Could you be in a position to pay extra on your loan? Paying extra and above the minimum can mean you slash your interest payable and even see you paying off your loan early.
It is also possible to structure your loan and get more out of it by accessing features such as a redraw facility or an offset account. By paying your salary into an offset account, you reduce the interest you pay on your mortgage each month. A redraw facility allows you to access any additional repayments you’ve made on your loan.
Alternatively, you could also switch to a simpler home loan with less features if you no longer require your current features.
Enter into the world of equity and investment
If you purchased in an area that has experienced home value growth while you’ve been paying down your mortgage, you may have a substantial amount of equity in your home.
Equity is calculated by subtracting the remainder of your mortgage from the market value of your home, usually done through a home evaluation.
You could also draw down on your equity to help fund a renovation or upgrade your home. And, if you want to, you could use your equity to help purchase an investment property.
Contact Us
Our team will help you search, choose and settle your loan. Chat to one of our loan specialists at a time that suits you.
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