Time For A Mortgage Review
Do you have a home loan?
Is your interest rate 3.59%?
Do you want to save over $100,000* without doing much at all?
Interest rates determine the cost of your home loan and what you pay back each month and how much interest you pay back to the bank over 30 years. A small difference in interest rates can make a big difference.
*For example, if you borrowed $500,000 over 30 years and your interest rate was 4.59% the total amount of interest paid to the bank is $421,684.
If you drop that rate by 1% (to 3.59%) the total amount of interest paid back to the bank is $317,351.
That’s a saving of just over $104,000!
On top of the interest rate, there are so many other things to consider when looking at loans:
- Fixed or variable
- Principal and Interest or Interest only
- Split repayment options
- Introductory and honeymoon rates
- Loan to value Ratio – how it can affect your interest rate
- Lenders mortgage insurance – (payable if borrowing more than 80% of the property)
- Guarantor options
- Loan security options
- Packages
Just to add to the confusion, there are 150 banks and credit unions in Australia, which have more than 3000 home lending products. That’s quite some choice, right? Do you know where to start? Do you understand the jargon?
Let me tell you a little story about my own situation:
I was once in a position where I ran my own business, and wrote off a significant amount of my income as business expenses. I was trying to get finance to buy a block of land and build a home. I went to my two local banks, both of which, I’d been a customer of for many years, but was declined by both, due to “lack of income and ability to service the loans”. I just didn’t understand, because I had used several online calculators and knew we could very comfortably meet the repayments. I then took my finance situation to my finance broker and was able to get the finance I needed from one of the mainstream lenders, without any issues at all.
Speaking from experience, I would highly recommend contacting a mortgage broker to sort through the plethora of options for you. They will come up with the best interest rate, based on your specific circumstances.
If you need a hand, I can connect you with a finance broker that I trust and has a strong track record for helping people (including me) get the best deal for their circumstances.
If you are more of a DIYer, and your situation is straight forward, by all means, do the research yourself. Head to a mortgage comparison sight, check out the rates and switch to something better.
Do you want to save over $100,000?
It’s time to switch to a better rate!