When was your last home loan health check?

October 05, 2017
Linda Coates

Has your home loan been sitting stagnant for as long as you can remember? Why not take this as a little reminder to reassess your financial goals and get a home loan health check to assess your loan’s suitability to your current lifestyle and financial circumstances.

When you first took out your home loan, it may well have been perfectly suited to your needs – and it still could be today. But it is well worth considering reviewing your options to make sure you are getting a red hot deal that is matched to your current lifestyle and financial situation.

Keep in mind that if your circumstances have changed since taking out your loan, you may now be eligible for a different loan type, one that potentially has a lower interest rate, additional features and better facilities. With low interest rates and increased competition between banks and other lenders, now is a good time to be actively seeking a better, well suited deal.

To determine whether your home loan is in need of a health check, here are a few simple questions to ask yourself as a starting point:

1.  Do you know your home loan's interest rate?

You could be paying too much! Make it your business to find out your home loan’s interest rate. A local mortgage broker, like myself, could perform a home loan health check which could reveal another option with a lower interest rate that is also a better fit to your current needs. You will need to weigh up the cost versus benefit of switching lenders and/or loan products.

2.  Have you just received a pay rise or bonus?

Adding a lump sum contribution to your home loan can help to reduce the interest owed and the term of your loan. A home loan health check can confirm whether your current home loan has the ability to make extra repayments. Keep in mind that if you have an offset account or redraw facility attached to your loan, you can still access the extra funds if needed.

3.  Have you recently moved from a single income to a double income?

You may choose to use your second income to repay your home loan sooner and/or build up equity to upsize, buy an investment property, etc. Using an offset account could be a good option, particularly if you now have more income to add to the account, which would reduce the overall interest charged on the loan. If your current home loan doesn’t have an offset account facility you may want to review those that do.

4.  Are you looking to expand your family?

If you want to lower your loan repayments for a set period of time to alleviate pressure or to use your funds in a different way you may consider switching to an interest-only loan. These loans offer many of the same features as principal and interest loans with the benefit of lower monthly repayments. Again, the cost versus benefit of switching lenders and/or loan products needs to be carefully considered.

5.  Do you have plans to upsize or downsize?

If you are looking to move to a different dwelling to suit your changing needs, there are a number of options available. Whether you are looking to upsize or downsize, a home loan health check will allow you to determine whether your current loan is still the most suitable or whether there is a better option available for you. In either case, a mortgage broker can help you assess your options.

If you want a local home loan expert to cast their eyes over your sums and make sure everything is right, give Ian Celantano a call from Mortgage Choice in Mentone on 9585 2000 or 0423 663 463, or send through an email with your questions to ian.celantano@mortgagechoice.com.au.

With access to hundreds of loans to compare we can tell you the costs for each loan, how to avoid paying too much and if switching is the right thing for you

What's even better at Mortgage Choice in Mentone is that our service is at no cost to you and we get paid the same commission regardless of which lender you choose - so you can be confident that our recommendations are provided based on what's best for your needs. 

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Posted in: Home loans

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