July 22, 2020 by Jim Demetriou
1. Home Loan Check
Review your home loan to check if it's right for your circumstances. Is the repayment structure suitable for your current circumstances? For example, would interest only be a better option right now versus principal and interest? Other product features can make a difference like fortnightly repayments instead of monthly, having an offset can reduce your interest costs. Consider what's right for you.
2. Consider a fixed rate
Interest rates are at historic lows. Some fixed rates are even lower. If rates move, your rate will stay the same for the term of the fixed rate. There is a level of certainty of cash flow.
Consider if a fixed rate is right for you as there is less flexibility and penalties may apply if repaid early. However, you may want to fix a portion of your loan and leave the rest as variable. This way, you are hedging your bet.
3. Speak to your lender
Ask your lender for to switch your loan to a more suitable product. At the same time, request a rate reduction. Most lenders are open to revieing your rate during these difficult times.
4. Calculate how much you will save
Work out what you will save based on the discount you receive from your lender. Calculate not only how much it will be over a 12 month period but over the life of your loan. The interest you will save will surprise you.
5. Speak to a broker
A broker has access to a number of lenders and hundreds of products. They will match a product to meet your objectives. An experienced broker will do a home loan health check and give you the facts on how much you could potentially save.
Speak to Jim Demetriou at Mortgage Choice Jannali, in the Sutherland Shire for a no-obligation chat about your loan on 02 9525 0112.
