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  • Writer's pictureLockwood & Ward

Home Loan Health Check

Updated: Feb 7, 2020

We all regularly check our personal health, but do we check our financial health in particular our home loan.

If you fail to review your home loan in the current interest rate climate, then you may be costing yourself as much as 1.5% extra in interest.

Whether you have only recently taken out a home loan, or had one for many years, regular check-ups on your mortgage can provide financial benefits.

Below we explain what to look for.

Interest rates are changing

The Reserve Bank has lowered the Cash Rate, and many of the major banks have followed, with lower home loan rates.This should prompt all borrowers to check on the current interest rate being charged, and what is available in the market. Banks don’t always flow on the reduced RBA rate, and at times it may take weeks or even months for the banks to react. If you have waited a few weeks, and your bank has not reduced their rate, then it may be time to consider refinancing.

Your Fixed Loan period is nearly over

If you are coming out of a fixed loan period, then it is very likely that current interest rates are lower than your fixed rate. This is a great time to check the market, and ensure that the variable rate being offered by your current lender meets the market.

Call us and we can shop around for you, and find the best variable rate in today’s market.

Interest only period expiring

Lenders have been put under pressure to reduce the amount of interest only loans on their books, and if you are coming out of an interest only period, you may find it difficult to renew. If your current lender is not willing to renew on your current investment property, then it is time to find a bank that will.

Again, we can find the right fit, which will help you save interest, and maximise the return on your investment property.

Do you have too many debts?

If you are finding it difficult to meet multiple repayments over a number of loans, then it is a great time to consider consolidating your debts into one low interest loan. You will be able to fast track the reduction of your debts and save on interest as well.

Perhaps your loan hasn’t been checked for years?

Life goes on, and sometimes we just let our loans take care of themselves, with the same old amount coming out of our bank accounts for years. In the current interest rate environment is will pay to check comparison rates in the market. It is a simple task to assess whether your current loan features are competitive in the market place.

We can assist with a review of your home loan, and believe that this should be done at least every two years.

What if your circumstances have changed

Perhaps you got that big pay rise, or you have started a family, or there is a renovation in the works.

All these circumstances warrant a review of your current loan, and consideration of other options available to assist with loan payments, and term reduction. Keeping your finances healthy is an ongoing task that should not be neglected. Changes in your financial commitments impact on most facets of your life. We are here to help with your financial affairs and ensure that you get the best result possible in today’s marketplace. Did you know that our mortgage broking division Clarence Street Mortgages, has access to all the major banks, and a panel of 30+ other lenders.

Let us compare you current loan, and see what you can do to improve your financial position.

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