Reviewing your lending, particularly in the year that has been thus far could be ideal means to minimize expenses, boost savings, and provide you financial parachute fund at a time of uncertainty such as the current. This could save you some money or even make money, depending on your strategy,and importantly, could help you sleep a little better at night to know that you have your finances under control, and have a contingency plan in place.
Consider asking what features you really need, and those you perhaps don't which could save you thousands! The official cash rate is at its lowest ever in 60 years and interest rates are at an all-time low. Your current rate may not be the most competitive at this point even if your mortgage is just over two years old. A very slight rate change could trim your monthly repayments instantly, improving your liquidity in these times of financial stress.
Banks at this point are competing for customers. A different lender may offer you better features on your loan that you couldn’t get previously, like an offset account, additional repayment and redraw facilities, an interest-only option or a fixed or split-interest option. If your current lender can’t offer you what you want, it's worth looking for mortgage options that do, and at the best possible rate!
Shorter loan terms
If you have a steady income despite the COVID-19 crisis, this may be the best time to refinance to a lower interest that could pay off your loan faster with the same repayments.
With refinancing, you can switch to a mortgage option with a shorter term, maintaining the same repayment amount.
If you're currently juggling a lot of non-mortgage debts, making it hard to pay, manage and track bills and payments, you might want to consider consolidating payments.
If you bundle multiple payments into your home loan, you'll have a clearer timeline on when you can be debt-free, plus you might have lower interest rates than other rates like credit card loans.
Despite the benefits, there may be costs involved in refinancing, depending on your loan and lender. Example costs and fees could be exit fees, government charges, or Lenders Mortgage Insurance.
It is best to consider getting a piece of advice from a mortgage broker if you plan to refinance.
At Get Smart Financial, we can help you with refinancing, so you can save more, and make the odds be in your favor.
Book a meeting so we can discuss!
Rachael Bland – Founder & CEO