Is it time to review your mortgage structure...?

Newsflash people!

Interest rates are currently the lowest they have been since the 1940s!

So how does your loan rate compare? 

I guess the first question should really be, when was the last time you reviewed your mortgage rates?

The world of finance can change with new lending offers on the table all the time. So, if it has been a few years since you looked at your mortgage structure, you could be missing out on the benefits of those changes. 

It might be time to review an expiring rate, or you might be interested in re-fixing your loan for a better rate, but aren’t sure if it’s worth paying the break fees. When done right, re-fixing your loan for a lower rate can save you thousands and you might not even have to switch banks or lenders.

If you are wondering whether it’s time to take another look at your mortgage structure, consider the following questions:

Is your rate about to expire?

If your fixed rate term is coming to an end, then you will need to consider re-fixing it at another interest rate. If you do not, it will roll over to whatever the floating or variable rate is for your particular lender. 

This is the time to look at what your plans are. Re-fixing is not as simple as agreeing to whatever your lender proposes to you when they call at the end of your fixed rate term. Consider if you are wanting to move house and in what timeframe, if you are planning renovations, or if you are happy to stay in your current home long term. The decisions you make here will help you to decide what to re-fix your mortgage at and for how long.

It is also a great time to check what other lenders are offering compared to yours. The best way of doing this is to have a chat with a mortgage expert, like the team here at Finance Marshall, for some advice about the best options.

Is your rate variable?

Locking in a low rate for a year or two could really save you some money if you are currently on a floating or variable rate. 

There is less flexibility with a fixed rate, but it does have some benefits depending on your situation. A fixed rate is especially good if you want the reassurance of set repayment amounts, you aren’t wanting make extra repayments, or the fixed rates have dropped lower than your variable rate. 

Do you have a lot of other debt?

If you have a significant credit card or personal loan debt, the interest rates on those will be a lot higher than on your home loan. Talk to us about your options in consolidating your loans to lower your overall rate, and get your debt paid off faster. 

Debt consolidation will often ease your financial position, making it easier to meet the various repayments on your short term debt.

Has your lifestyle changed or is it about to?

Having a child, moving to a single income, retirement, redundancy – there are heaps of lifestyle changes that can alter your financial state. Reviewing your home loan structure and rates is important during these times. That way, you can be sure you will still be able meet your repayments.  

Also, if you are wanting to remodel or renovate, you could consider taking a top up on your current lending. This will help you to avoid short term debt and recover some of the associated costs with a lower interest rate.

All about break fees

The question on everybody’s lips when we talk about restructuring an existing loan is… what about break fees?

When you are looking at a new loan structure, we sometimes find that a different bank or lender has a much lower rate than your current one. We are your best attack and defence when it comes to if and what fees you will need to pay. We can show you how all the numbers stack up and figure out if it's worth it to make the switch. That's what we're here for! 

There are lots of things to consider when it comes to reviewing your mortgage structure. We do the hard work so you don't have to. If you think it's time to look at a re-fix or new home loan – talk to the Finance Marshall today.


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