08 Mar How often should you be reviewing your home loan?
Rising borrowing costs and the escalating cost of living have made it more important than ever to make sure you’re staying on top of your mortgage repayments.
One of the best ways to ensure that you’re repayments remain manageable is to regularly review your home loans with your mortgage broker in Melbourne. Reviewing your home loan is an important part of managing your finances and it also gives you the opportunity to compare other options in the market.
Here are five reasons why you should review your home loan regularly:
Interest Rates and Better Deals
Interest rates will always be changing and your home loan may not always offer the best options for your needs. Reviewing your home loan regularly can help you compare deals and potentially save you money. Speak to a mortgage broker at least once a year to ensure that you are getting the best deal possible. There are sometimes opportunities to find lower introductory rates as well as looking at options like fixed-rate periods or even interest-only repayments depending on your personal circumstances and needs.
Adjust Repayment Frequency
When reviewing your loan and doing something as simple as aligning your repayment cycle with your pay check can have some big advantages and help you manage your cash flow better. Reviewing your home loan may allow you to adjust how often you make your repayments and find a better option. By changing from monthly repayments to even something like fortnightly, you’ll end up paying down the mortgage faster which could also save you money.
Take Advantage of New Features
Home loan features change over time, and there may be new options available that weren’t around when you took out your home loan. Reviewing your mortgage may help you discover new home loan features that could make a real difference in helping you pay it off sooner. Some great options to consider are offset accounts, redraw facilities, interest-only loans or fixed-rate loans. An offset account is a great way to help save interest and works well when combined with other money-saving techniques and proper budgeting.
Consolidate Your Debts
Refinancing your home loan may allow you to take greater control of your finances and consolidate your debts at the same time. Combining some of your higher-interest personal debts, such as credit cards and even car loans with your mortgage could reduce your overall interest repayments and help you get out of debt sooner. It can also make it far easier to budget with only one loan repayment to think about. Consolidating works by paying off the higher-interest debts when you refinance and rolling them into your mortgage at a lower interest rate.
Market trends can change, and it’s important to take up these opportunities when they come along. When interest rates are low, you may be able to lock in a competitive fixed-term rate to take advantage of the state of the market. When interest rates are higher, it’s worth comparing your options and looking at more competitive rates or new offers that are currently available that might suit your personal circumstances.
It’s important to review your home loan regularly to make sure they are not only the right product for you but they have the best features to help you stay on top of your repayments. Working with a mortgage broker in Melbourne can help make the process easier and save you time and money.
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