Why it pays to review your mortgage regularly
How long has it been since you last reviewed your mortgage?
If it has been a while, chances are you could be paying more than you should. Worse still, your home loan may no longer reflect your current needs and goals.
How often should you review your mortgage?
Life changes and so too should our mortgage.
If you have changed job, had a baby or received a pay rise within the last 12 months, you may no longer be in the right home loan for your needs.
As a general rule of thumb, it is a good idea to give your home loan a health check once every year to make sure it is still the right product for you. And, the start of a New Year is a great time to review your home loan.
By shopping around for a better deal, you could save thousands of dollars in interest charges and potentially shorten the lifespan of your loan.
Moreover, given that many of Australia's lenders have recently increased their home loan interest rates (a trend that is expected to continue this year), now really is the perfect time to review your current home loan and see if there is a better, more sharply priced product on the market.
The good news is there is no shortage of options to choose from, with all of Australia's lenders offering a range of very competitive home loans.
Whether you are looking for a variable rate home loan, a fixed rate or even a split rate mortgage, there will be a product on the market that suits your needs.
In recent months, we have seen a surge in the proportion of borrowers choosing to fix part or all of their mortgage.
According to the latest Home Loan Choices data from Mortgage Choice, 22% of borrowers fixed their mortgage last month – up from 19% the month prior.
By fixing part or all of your mortgage, you can enjoy ‘mortgage repayment' certainty for a set period of time.
We help you search through the hundreds of home loans on offer to find a mortgage that is right for you.
Not only will we put you in a product that is better suited to your short and long term goals, but we may be able to save you hundreds (if not thousands) of dollars in the process.
If you do decide to refinance your home loan, we can do all the paperwork for you, so that the only thing you need to worry about is planning your weekend activities.
How long should I fix my mortgage for?
A fixed rate home loan will have a predictable repayment amount over the fixed term, so you can be sure that your repayments will not fluctuate at all during that time. However, it's important to note that during the fixed term your repayments will not fall if the rates decrease and most lenders will limit the amount of extra repayments, therefore penalising early payouts of the loan.
Although most lenders offer fixed terms between one and ten years, most homeowners will choose a fixed term between one and five years. See our Fixed vs Variable home loan comparison for more details on how long you should fix your mortgage.
Should I change my mortgage?
Changing your mortgage through a refinance can be due to many reasons and hold different benefits. People who change their loan via refinancing will do so to secure a better interest rate, switch between variable and fixed rates, consolidate debt, or to access home equity. If you are looking to change your mortgage for one of these reasons, it is just as important to consider the potential costs with refinancing such as exit fees, borrowing costs with a new lender, lenders mortgage insurance, or stamp duty.
If you would like a free home loan health check, give our local Mortgage Choice broker a call today.
Review your home loan now to find out if you're getting the best deal with our free home loan quote!
You might also be interested in:
Refinancing guide
Considering refinancing? Our guide explains the reasons, costs and steps involved in refinancing your home loan.
