It may seem like a bit of overkill to review your mortgage every year but from our experience it’s definitely a worthwhile experience that can often end up providing you with surprising results.
Following is a list of 5 reasons why you should consider reviewing your mortgage annually.
- Your interest rate is too high.
This is an obvious one and you’d be surprised at how many people are not aware of the exact interest rate they’re currently paying. A recent study released by Ubank showed 85% of people are unable to state their exact interest rate on their home loan.
Many people just set up their home loan and keep making their repayments without reviewing interest rate changes. You could be costing yourself thousands by not regularly reviewing your interest rate
We’re constantly refinancing clients and saving them 1-2% interest per annum. On a $300k loan that’s a $4,500.00 saving in interest. That amount goes a long way to a nice little holiday for you and the family!!
Lenders love new clients!
At the current moment, lenders are super keen to get new Owner Occupied loans onto their books to keep APRA happy. They’re offering great deals to entice clients to refinance with them, while not giving any love back to their existing clients. At times, they increase the rates of their existing clients to cover for the discounts they’re offering their new clients.
Most existing clients just wear the increase on the chin assuming that it’s occurring across the market. The Banks, particularly the Big 4, know that most their clients will do nothing about the increase. That’s why their profits are so large.
2. Your profile has changed.
From when you first took your mortgage out, there’s a good chance that your profile has changed. That 90% LVR loan may now be a 70% loan thanks to the rising property market and the fact that you’ve been paying down your mortgage quickly.
This new profile means that you deserve better pricing than what you were entitled to when you first took your mortgage out. Lenders will aggressively bid for your loan resulting in immediate savings.
3. Your loan is outdated and doesn’t have the features you need
Loans have developed a great deal over the past 10 years and even over the past 12 months. The loan you originally took out may no longer be the best for you, particularly if you’re looking to invest.
Even though the interest rate may be competitive, the loan may lack features that are effectively costing you money. Features such as Offsets can save you a considerable amount of interest if structured and used correctly.
Further to this your own personal situation may have changed significantly since you first took out the loan and the original mortgage may not be cutting it anymore.
4. To ascertain whether you’re using the loan features correctly.
We’d love a dollar for every client we see that isn’t taking advantage of their mortgage features. Usually it’s simply because they haven’t been shown how to use the loan correctly.
Taking advantage of your mortgage features is the simplest, most effective and safest way to create wealth. It’s about saving interest and usually lots of it!
In a review, we will look at your individual situation and see if we can suggest ways that you can perhaps use your mortgage to improve your situation.
5. Start you on your investment journey.
Many of our clients have started their investment journey following a review. During the process they’ve discovered they were in a position to purchase an investment property or a share/managed fund portfolio with little or no impact to the family budget.
Once they start down this pathway, it’s amazing how quickly they can grow their portfolios. We’ve seen several clients accumulate multi property portfolios in a very short period of time, all of which are helping them pay off their residential mortgage in a substantially quicker time frame than if they did nothing.
The review process is free of charge
We offer the review process as a free service to our clients. Our business model is one where we’re remunerated on a successful outcome, so we can quickly review and let you know whether there are any savings to be had or improvements that can be implemented.
If you have a mortgage that has been established for some years, then it is time to review the rate and see if new features are available that would be beneficial to you.
So..if you haven’t had your loan reviewed recently, or would like to know whether you’re able to consider heading down the investment path, contact us directly and book a time for a review. That next holiday could be a phone call or email away!