5 reasons to check your home loan rate

You might be tempted to 'set and forget' your home loan, but it’s important to reconsider your options every now and then. Here’s why.

  • 5 June 2018

    Disclaimer: The information contained in this article is of a general nature only and should not be taken as financial or legal advice on any of the topics discussed. Always consult a financial adviser before making any investment decisions.

    When you first took out your home loan, you most likely looked around to make sure you were getting a great deal. But when was the last time you checked to make sure you were still getting the most out of your home loan?

    You might be tempted to 'set and forget' your home loan, but it’s important to reconsider your options every now and then. Here’s why:

    1. You could save money 

    Finding a cheaper interest rate can add up and save you thousands over the course of your home loan. It can also reduce your repayments, meaning more money in your pocket each month. Then, you can use that extra cash to pay off your home loan sooner, or just free up your budget to indulge a little more. Either way, it can give your wallet some extra breathing space.

    2. It’s a great time to re-evaluate 

    When you refinance your mortgage it can be a great time to re-evaluate your finances and get on top of any outstanding debt. Many lenders will allow you to consolidate personal debts including credit card balances or personal loans into your mortgage. That will mean less repayments to maintain and an easier to manage budget.

    It’s also a great opportunity to review the frequency of your repayments. For example, if you’ve been maintaining a monthly repayment, but your salary is paid weekly or fortnightly, when you refinance you’ll have the chance to align your repayments and salary—further simplifying your budget.

    3. Get more flexibility 

    Chances are that if some time has passed since you took out your home loan, there could be new home loan features available in the market. Features such as 100% offset accounts and alternative fee structures allow you to reduce the amount you pay for your mortgage, meaning you could pay off your home sooner. 

    4. Take advantage of your home equity 

    The value of your home may have risen since you took out your loan, and most lenders will allow you to tap your home equity that has built up in that time. If you’ve been putting off a home renovation or improvement, or some other major purchase like a new car or much needed holiday, refinancing could be a good opportunity to take advantage of your home’s value and make it happen.

    5. Record-low rates 

    Interest rates are at record lows, and fixing your interest rate will allow you to capitalise on the current interest rate market. It can give you peace of mind to know that your home loan repayments won’t change for the duration of the fixed period you choose, which can make budgeting much easier.

    Interested in finding out more?

    Then book a free home loan health check today! Our home loan specialists can help you weigh up the pros and cons to help you find the right low interest home loan for your situation. No strings attached. No obligations.

    Remember, at Teachers Mutual Bank, we have a range of home loans that can suit anyone.

     

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