Are you getting the best deal from your lender? No doubt you got the best rate when you first set up your mortgage, but how long ago was that? Did you know that Australia currently has the lowest interest rates in over 30 years, and by taking advantage of the current market you could save yourself hundreds if not thousands of dollars and help you to achieve your goals sooner.
Ideally you should review your mortgage annually, or when your circumstances change that effect your financial situation. Getting a promotion, changing jobs or even having children, can have a dramatic effect on your finances which may mean your loan structures may not suit you anymore.
Changes in the economy are a perfect reminder to review your mortgage structure. As the cash rates drop so do interest rates. Did you notice that not all banks pass on the full interest rates when they are announced? This makes for a very competitive market for you to find the right product to suit your needs.
As everyone’s needs and goals are different, there are also different reasons to refinance your current mortgage;
Refinance to lower your interest rate.
As interest rates are at an all-time low, some lenders are offering products around 4.5%, and if your home loan is at a higher rate, now could be a good time to refinance as it could save you tens of thousands of dollars over the life of your loan, especially if you can still afford to keep the repayments at the same amount you were paying before the refinance.
Refinancing to reduce the term of your loan.
By refinancing to a shorter term loan, you will become debt free sooner, and by taking advantage of the low interest rates you could find that moving from a 30 year loan with a higher rate to a 15 or 20 year loan with a lower rate, the difference in monthly repayments may not be much more than what you currently pay.
Refinancing to lower your payment.
Refinancing to a lower interest rate could mean freeing up hundreds of dollars per month of your hard earned cash to go into your pocket and not the banks. While this sounds great, you need to consider if you really want the extra funds now, as you will reduce the interest but you do not reduce the life of the loan and in some cases even increase it.
Refinancing to access your equity.
Now sounds like the perfect time to redo your mortgage to access some of your equity for other purchases; for instance to renovate or to purchase an investment loan or start a business. This may be perfect for you if it suits your financial goals and strategy.
No matter which way you look at it reviewing your mortgage now is a no brainer, what have you got to lose?
If it is sounding a bit too hard and complicated, it doesn’t have to be, a free review from a professional mortgage broker who has the skills and expertise to look at your current mortgage and understands your goals, will be able to offer you the best products on the market to suit your needs, saving you time and money.