by Jye Smith
UPDATE 4 MAY 2022: The RBA has increased rates by .25%, the first time in over 10 years, with more rises tipped to come. All the major banks have passed on the rate increase in full, but some lenders offering rates better than 2%. We can help you get the most competitive deal…
When it comes to your home loan, making sure you’re getting the most competitive deal is important. Even a small difference in your interest rate can mean thousands of dollars over the long run.
That’s why it’s important to regularly review your mortgage and ensure it’s right for you.
Here are some signs it may be time to shop around for a new lender.
Your Home Loan Is Getting Old
The days of staying with the same lender for 30 years are long gone.
In fact, if you’ve had your home loan for more than two years, chances are you could be paying more than you need to.
The home loan market is highly competitive and new products are being released all the time.
You may also benefit from loan features such as offset accounts (whereby any money you deposit is offset against your loan balance, saving you money on interest) or a redraw facility.
A redraw facility allows you to make extra repayments on your mortgage and save on interest, but you can still access and withdraw those extra funds at any time.
The Honeymoon Period Is Long Gone
When you first take out a home loan, lenders may offer you a sweet deal to reel you in.
It’s not uncommon for them to waive fees or discount interest rates to new customers. This kind of loan arrangement is frequently referred to as a ‘honeymoon period’.
But once the honeymoon is over, the loan may revert to a more expensive or less convenient loan than you would like. If that’s the case, it’s time to look at new options. This is something we see a lot with ‘loyal’ borrowers.
You’re Not Happy With The Service
If you’re always chasing your lender about rates or ways to save, it may be time to move on.
Similarly, if you’re sick of talking to a voice recording and crave real human interaction, there may be other lenders who place greater importance on customer service.
There’s no shortage of lenders out there and you may find that some are better able to give you the support you need.
Your Needs Are Not Being Met
Life changes and when it does, it’s important to ensure your mortgage still meets your needs and goals.
Maybe you’ve had a job change or promotion. Perhaps you’ve had a baby or your living arrangements have changed.
When these things happen, it’s a good idea to make sure your mortgage is still right for your needs.
Ready to Shop Around?
The easiest way to ensure your mortgage is right for you is to talk to us.
We operate under a statutory obligation (best interests duty) to act in your best interest when providing any credit assistance. Banks, however, are not required to operate under the same obligation and simply cannot with being able to only offer their suite of products.
We’ll assess which mortgage may be right for you, based on the cost of a product (the interest rate, fees, charges, and repayment size, for example), and other considerations (such as loan features) which may be of value. Not all lenders are the same and if they were, there would not be so many.
Case Study: Refinancing Business Loan to Home Loan
We recently assisted a client who had a commercial loan from a business they no longer have, making this loan type redundant for their needs. This was also coupled with their home loan against their primary residence. The business loan interest rate was 4.57%, the home loan was 3.19%, and their current lender was unable to assist.
We were able to refinance the business debt and their home loan into the same loan, at a rate of 2.24%.
This helped our client by:
- Achieving an annual interest saving of over $9,000 per year
- Reducing their principal and interest repayments by over $780 per month
- Converting the loan to one easy to manage repayment.
This was a great outcome as the borrower will own their home sooner – the client’s only regret was not talking to Lambourne Partners Finance earlier.
Contact Us For Assistance
If we can help you with any of the options noted above or anything finance related, please contact us below or call (02) 4969 6600 for a free, no-obligation conversation about what might be possible for you.