Our top 5 savings tips for home loan holders

With the Government revealing little in the way of reforms to give the average Australian a financial boost, Mortgage Choice says the onus is on the individual to help themselves claw back any holes left by changes made in the Federal Budget.

This latest budget didn’t throw any lifelines to the average Australian so this is the ideal time for families to review their household budget. It is important to review the fees, rates and charges they are paying for the financial products they hold, specifically their home loan as this is the single biggest outgoing for most families.   

Top 5 savings tips for home loan holders:-

1)  Check your home loan rate following this month’s cash rate cut by the Reserve Bank – Keep in mind, not all lenders have passed on the rate cut so borrowers with a variable rate home loan should do their research and shop around if they have not benefited from the full rate cut.   

2)  When rates fall, keep repaying more – Consider keeping your repayments at the higher, pre-cut level and help repay your home loan sooner while building up a financial buffer for the future.  

3)  Make the move from monthly to fortnightly repayments – Switching your monthly repayment to fortnightly may make a significant difference to your loan term and the interest owed over the life of the loan. There are 26 fortnights in one calendar year, so by paying fortnightly you make the equivalent of 13 monthly repayments during the year.  

4)  Avoid added stresses – A major cause of repayment headaches is the mindset that a new car, renovations and/or furnishings are must-have items following a property purchase. Maintaining a tight rein on your post-purchase spending will help you to avoid adding any unnecessary pressure to your finances.  

5)  Book an annual home loan health check – Regularly revisit your home loan’s fees and features, plus your repayment strategy. Consider booking in for an annual home loan health check with a local mortgage broker to see how your home loan stacks up against other products currently available. If your personal circumstances have changed, you may now be eligible for a wider range of products and/or discounts.  

More often than not, it costs nothing and takes only a small amount of time to review your home loan. Given the potential savings that could be made, there is nothing to be lost by shopping around with the expert help of a mortgage broker, like myself.

Posted in: Home loans

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