When was the last time you reviewed your home loan against what else is available? With careful research, you may be able to save thousands by refinancing or renegotiating your home loan.
With interest rates on the rise, we all need to ensure we’ve got the best home loan for our needs. Whilst some of the smaller non-bank mortgage lenders have left the market, there is still plenty of competition for your business, giving you the opportunity to secure a better deal.
Three things on the checklist
It is important to review your mortgage home loan every couple of years or when your situation changes. There are three important things you need to do:
Fees apply if you refinance, and research by ASIC found that credit unions and building societies may charge less than the Big Four.
For example, if you refinance a $250,000 variable-rate home loan within three years, you may have to pay anything from $200 to $8100 in fees, depending on your lender.
Mortgage insurance is required if you borrow more than 80% of the value of your home and could be close to $10,000 for a $400,000 loan. It may not be worthwhile switching if you have to pay it again for the new loan.
Three steps to refinancing
With interest rates on the rise, we all need to ensure we’ve got the best home loan for our needs. Whilst some of the smaller non-bank mortgage lenders have left the market, there is still plenty of competition for your business, giving you the opportunity to secure a better deal.
Three things on the checklist
It is important to review your mortgage home loan every couple of years or when your situation changes. There are three important things you need to do:
- Do your homework. A meeting with a mortgage broker is both convenient and offers plenty of options. Mortgage brokers can compare hundreds of home loans from across the market. Part of their role is to stay up-to-date with the latest changes or special offers being made by the mortgage lenders to ensure you can get a great deal.
- Look beyond the interest rate. When deciding whether to refinance, weigh up the costs of switching against the interest savings, and check what would happen if you switched again in the near future. For example, does the new loan have a high early repayment fee and how long would it apply?
- Don’t forget credit unions, building societies, and other non-bank lenders. They can sometimes have lower variable interest rates and lower fees than the Big Four banks.
Fees apply if you refinance, and research by ASIC found that credit unions and building societies may charge less than the Big Four.
For example, if you refinance a $250,000 variable-rate home loan within three years, you may have to pay anything from $200 to $8100 in fees, depending on your lender.
Mortgage insurance is required if you borrow more than 80% of the value of your home and could be close to $10,000 for a $400,000 loan. It may not be worthwhile switching if you have to pay it again for the new loan.
Three steps to refinancing
- Cheap rate or full package? Don’t pay for features you don’t need. Decide which you’ll use, such as an offset account or redraw facility and whether you want to fix all or part of your loan.
- Shop around. Using my services will give you access to many lenders and loans.
- Add up the costs and benefits. From your payout amount, figure out the total interest payable over the life of your loan hen compare other loan options. Include the fees and penalties involved in making the switch. I can help with these calculations.
Posts
