Have you found yourself in the same boat as the rest of homeowners across the country, in a state of panic when your Home Loan Statement arrives? Over the past 12 months there have been exponential rate increases which have drastically affected monthly repayment on your home loan.
There are also those who are soon to face this harsh reality as fixed rates are due for expiration, and the days of below 2% interest rates are soon to become a distant memory.
If you are in this situation, it’s important to know what your options are in this climate of rate rises. You do not have to succumb to the thought “I guess that’s my new rate now, my bank has decided”. Fortunately there are options for you to explore to put money back in your pocket.
RENEGOTIATING
The first option is renegotiating your variable interest rate with your current bank. This can be referred to as a pricing request. This provides the potential to lower your interest rate saving on the amount you repay in interest.
Even to reduce your loan by 0.5% would save the average home loan close to $40000 over an average 30 year loan term. (What would you spend $40000 on?) The benefit of renegotiating is being able to stay with the same bank, not go through an application process, and is usually executed quicker than other options.
Mortgage holders should be in the habit of reviewing their interest rate at least once every 12 months
REFINANCING
If you hit a brick wall with your bank and they are unable to provide you a better rate, then there is the opportunity to refinance your home loan to a new bank. While there is a process to refinance your home loan there are the added benefits of reducing your interest rate, gaining extra features depending on the bank you choose (multiple offsets, better internet banking etc)
There are also banks that offer cash back deals if you choose to refinance your loan to their bank. If eligible, this option not only saves you money but also allows for you to find a new bank that may be a better fit for you.
WHERE TO FROM HERE?
It is important to understand that you have the power to make a difference in your finances, including your mortgage. Whether it is refinancing or renegotiating, it’s important to take advantage of the opportunity.
We’re here to help you take advantage of that opportunity. Our Team at REACH lending group are experts in negotiating with your current bank or looking at options with other lenders. Our vision is to help remove that anxiety of dealing with banks, wait times, knowing what’s better etc – So that you can Reach your financial goals and pursuits.
So don’t stay in the boat, make a choice today.