Our top 3 tips to offset higher mortgage costs
by Alan Harrosh
Following yesterday's bad news of another rate rise, here is our top 3 tips to saving some money on your existing variable home or investment loan.
1. REVIEW YOUR RATES
Click the link below for us to review your existing variable home or investment loan. We will submit a pricing review to your lender to see if your existing discount can be increased, lowering your rate. It's fast and it's free.
2. SPLIT YOUR LOAN - PART FIXED / PART VARIABLE
Consider splitting your loan into part fixed, part variable. Doing this can provide a hedge against further rate rises and certainty of repayments. It also provides the flexibility and benefits of a variable loan such as 100% offset and the ability to make additional repayments.
There are some compelling fixed rates currently available. 3 year fixed rates are coming up cheapest, starting at circa 5.39% compared to competitive variable rates circa 5.54% (pre June rate rise). 1 year fixed rates are circa 5.59% which is attractive if you are already paying more. As always though, the risk with fixing means you could be trapped in the fixed rate long after rates begin falling. To discuss this further just send me an email or give me a call.
3. REFINANCE YOUR LOAN & CASHBACK
If renegotiating your existing loan doesn't net market competitive rates then it might be time to consider refinancing.
New lending rates are almost always lower than existing rates. The aim is to obtain a lower interest rate but maintain the same remaining loan term so you don't end up paying interest for longer. Some lenders are also offering refinance cashbacks between $3,000 - $5,000; however these are quickly drying up with CBA, Bankwest and NAB already pulling these from market.
If you haven't reviewed your loan for some time, I urge you to get in touch. It doesn't take long for us to review the loan to see what kind of savings might be available.