With the next move in home loan interest rates expected to be upward, it is time to revisit your home loan rate and review your options. Should you fix your interest rate? Should you refinance? Are you on the best possible deal in the market? And, most importantly, is your mortgage product still right for you?
According to experts, by shopping around for a better deal, you can save thousands of dollars in interest and also shorten the term of your home loan potentially. The best part is that Australian lenders are currently offering a vast range of competitive home loan deals and, by spending a little time on research, you can definitely find a financial product that suits your needs.
At HashChing, we urge homeowners to review their home loan at least once every year to ensure they are on the best possible deal in the market. To help you compare home loans from the comfort of your screen, we have created an easy-to-use mortgage comparison page that enables you to compare broker pre-negotiated deals from over 60 lenders across Australia. Of course, if you find it easier, you can always speak to a broker and ask them to review your home loan for you.
Here are 5 good reasons why:
- You have lower rates available – Consider you have a $500,000 home loan at a variable rate of 5.00 percent per annum for 30 years. By switching to a rate that is one percent lower than your existing rate, you could save up to $300 a month or a whopping $106,931 over the life of the loan. You may use these savings to pay your home loan faster or invest it further or use it to meet any of your other life goals.
Tip: Like all good things in life, refinancing your home loan is not free. To ensure you gain out of refinancing, determine the cost of discharging your existing loan and setting up a new one to calculate your breakeven point and your actual savings.
- Your financial situation has changed – There are several situations that can crop up in your life and change your financial situation for better or worse. Fortunately, it is usually possible to refinance your home loan to one that is in line with your current financial condition and future goals. Speak to a broker about your unique situation to understand your financing options better.
Click Here To Find A Local Top-Rated Mortgage Broker & Start Saving Today!
Note that a traditional principal and interest loan is suitable for most home buyers but you can still opt for an investment loan if your lender feels it is suitable for your situation. This can be the case when you want to purchase an investment property; your income is reduced for a short period (sickness, bereavement, maternity leave, etc.); or you are planning to buy a property that you will sell in the short-term to pay off the loan. It is also possible to refinance your home loan to consolidate your debts.
- Your credit has improved – If you had bad credit or a ‘not-so-great’ credit score when you took out your home loan, your lender probably charged you a higher interest rate on your home loan to reduce their risk. So, if your credit has improved over time, it is a golden opportunity to negotiate a better rate with your lender or refinance with one that offers you better rate and terms on your home loan.
- You want to fix your rate – Home loan rates in Australia have been declining for over six years and the next move is expected to be in the opposite direction. So, if you think an increment in your mortgage rate would put you under stress, it may be wise to fix your rate now to maintain a regular cash flow in the future.
In case you are considering a fixed loan, note that fixed rate loans are not very flexible in terms of repayments and usually don’t offer helpful features such as an offset account. Learn more about fixed and variable rate loans.
- You want to make a ‘special’ purchase – When it comes to important purchases in life, such as buying a car or enrolling for higher education, it is not always possible to have a mountain of cash to fulfil your needs, and in most cases, you would need to head to the bank to borrow money. However, in most cases, refinancing your home loan to unlock your equity could be a cheaper option than taking a high-interest rate personal loan. Understand your options better by filling up this contact form so that we can put a mortgage broker in touch with you.
The simplest way to refinance your home loan
Currently, the average variable home loan rate in Australia is around 3.80 percent. In case you are paying anything more than that, you are possibly throwing away your hard earned money at the bank. So, shrug off the laziness and get better control over your finances by comparing home loans online.
Whether you are looking to reduce your monthly repayments, consolidate your debts or free some cash to renovate your home, you could explore the option of refinancing your home loan to take advantage of the lowest home loan rates in history.
The process is simple!
Hop on to a comparison website such as HashChing to see what rates are on offer. Armed with this knowledge, you could call up your bank and ask them to offer you a better rate. In case your bank is reluctant or you are still not happy with their best offer, choose a deal on the HashChing website and let our mortgage brokers deal with the rest. Alternately, you could speak to a broker online or fill up this contact form so that we could put a verified mortgage broker in your area in touch with you. Remember, the service is absolutely free!
By Vidhu Bajaj,
HashChing Content Writer