Increased competition between lenders means there could be advantages in reviewing your mortgage on a regular basis. Your mortgage broker can help you compare packages across lenders to find one with an interest rate and features to help save you money and pay off the loan sooner.
A mortgage review is not just about finding a cheaper interest rate. Many lenders offer both fixed and variable rate loans, and your broker can show how a fixed rate may benefit you in times of uncertainty by locking in payments to give you greater cash flow stability.
However, having a fixed rate may work against you should interest rates drop, so your broker can also show how a split rate mortgage lets you fix the rate on part of the loan while the rest is variable.
Your broker can also advise you on how making lump sum payments or even small additional contributions above your monthly minimum can make a big difference when it comes to paying off your loan sooner.
Many mortgages come with features such as low-rate credit cards or redraw facilities, which can help you through unexpected financial hurdles. But these features can push up the fees or interest rate, so if you are not using them, it might be worth swapping to a simpler and cheaper mortgage.
Your broker can also show you the benefits of an offset account, whereby your savings are offset against the amount owing on the mortgage when your interest is calculated. This option lets you keep some cash in reserve.
It's a good idea to review your mortgage every 12 months to capture any changes in the market or your personal circumstances. Although there may be costs associated with swapping mortgages, savings over time may outweigh these costs. You broker can help you with these calculations. With access to a wide range of lenders and mortgage products, your mortgage broker can advise you on selecting a product to save you money and help you pay off your loan sooner.