Want to save thousands on your home loan in just 30 minutes? Here’s how:
Do you want to save money? Want to travel around Australia now that lock-downs have ended? Need some extra cash for an important purchase or just after some extra to #TreatYoSelf?
If you’re a home owner, you know how expensive all things home can be. Council rates, water bills, electricity; the list goes on. That’s not to mention your mortgage, which you probably pay hundreds of dollars on per month.
With all these things sucking up funds, it can be hard to splurge on fun ‘life’ things such as travel and holidays. We’ve got one simple trick to save you thousands though: Refinance your home loan.
In the wake of Coronavirus, the Reserve Bank of Australia cut interest rates down to 0.1%. This was a historic low, and Australians are still reaping the benefits of this cut with current home loan rates sitting below 2%.
However, if you’re currently locked in to a loan, the RBA’s decision doesn’t necessarily mean you’ll automatically benefit. Your bank won’t contact you and tell you that rates have changed and you could save money; you need to take an active approach and call your bank for a better deal. While your current rate may not look that might higher than rates offered now, it’s worth it to call: every small change can save you thousands over the course of your loan.
Tips for getting a better rate:
Check out current rates – an online search can let you know current rates for a variety of banks and lenders so you can easily compare your current rates. Look at your current lender too and see what rates they’re advertising, what they’re offering new customers and make sure you know the rate you’re on currently to compare.
Call your bank – ask them if they can provide a better rate on your home loan.
Swap banks – If your current lender can’t go lower and you know another has great rates, refinance and change lenders. Be aware it’s not all about interest rates – offset accounts and redraw facilities are some features that are linked to home loans. Make sure that you’re getting the features you need, along with a better interest rate.
Get help from a mortgage broker – each bank will only show you their products and promote them, not necessarily showing you the top product between all lenders and banks. Mortgage brokers can compare the entire market, including banks and lenders you may not have heard of, and can show you the true best deal available without bias. Mortgage brokers receive a referral commission, generally the same between lenders, so they don’t get any special benefits from pushing particular lenders at you. You can be fairly sure they’re showing you products with your best interest and needs at heart, and it can be helpful to have someone who understand the technical jargon and can explain the entire process before you start signing anything.
If you’re after assistance from a mortgage broker, or have any questions regarding buying your first home or the refinancing process, give us a call!