At this time of year it can feel like your bank account is a one way street with funds flying out the door. If you feel like you can’t get ahead, it really pays to look where your money is going and start plugging those holes.
If you start with just 3 expenses, you stand to save hundreds of $$
- Electricity bill
- Health Insurance
- Home Loan
After reviewing my electricity provider I realised that I was only receiving a 3% discount but I found that there was an 18% discount available to me with the same provider. It took me 10 minutes to review the options on-line and change over and I am now set to put $800 a year back in my pocket!
The next on my list was health insurance. I knew that I was paying too much and paying for services I didn’t need. A review with my current provider enabled me to reduce my monthly expense by $50 a month or $600 a year!
But the biggest advice I can give you is to review your home loan. I have a great rate but unless you review your home loan every 2 years, you will certainly be paying too much. I am passionate about saving our clients money on their home loan or reducing their repayments to help their monthly household expenses. If your home loan rate is over 4%, you stand to save by reviewing your home loan.
For example and hot off the press! I have a major lender who is offering a 3.69% 2 year fixed home loan, on an owner occupied home loan with principle and interest payments which is very good. On top of this they are offering a $1250 refinance rebate which would more than cover the expenses of refinancing an existing variable home loan. On the variable side of things I have rates as low as 3.79% for owner occupied principle and interest lending which is also very good.
If your goal is to pay your home loan off more quickly, by refinancing to a lower rate and keeping your repayments the same, you will pay your loan off much more quickly and save thousands in interest. Let’s say your home loan is currently $250,000 on 4.5% and there is 20 years left to go. Your repayments would currently be approx. $1581 a month. By refinancing to 3.79% and keeping your repayments at $1581, you could pay your loan off almost 2 years faster and save thousands of dollars in interest over the loan term. In this example the saving in interest over the loan term based on these interest rates would be almost $33k ! and refinancing to 3.69% will save you even more!
If cash flow is currently a challenge for you, you could refinance your home loan back out over 30 years and reduce your repayments down. Let’s say your current home loan is $250,000 and your current variable rate is 4.5% and you have 20 years to go. Your repayments would be approximately $729 a fortnight. If you refinanced your home loan at 3.79% over a 30 year term, your repayments would reduce to $537 a fortnight. That’s almost $5k a year back in your pocket!
If you don’t change anything, you will unfortunately get the same result!
Let me help you to plug those holes and help you to take back control of your finances!
Call Melissa Burt and the team from Mortgage Choice in Modbury on 8263 2930 or 0403 382 327. We would love to help you.