Most mortgage holders haven’t changed their home loan in the last five to 10 years, even though their circumstances have most definitely changed in that time.
Largely that’s because there’s the perception that refinancing is a difficult process or because people think the deal they got at the time was good — it it ain’t broke, etc, etc, etc. The truth is that banks will readily increase their rates and let you know via email or their app and you can do the same to them!
Mortgage brokers suggest refinancing often
Lenders are always in search of new business and every now and then they’ll reduce their interest rates, in order to remain competitive in the market.
So even if you think you already have a good deal on your rates, you may be surprised to find there’s a better one out there, particularly if you have a good credit rating.
In fact, most mortgage brokers recommend that you review your home loan each year — or at least each time your circumstances change.
Review your home loan as often as your utilities
There’s no hard and fast rule for when or which time of year is best to review your home loan, but you should probably do it as frequently as you would update your mobile plan or your energy plan.
(If you don’t review your energy plan already, you should do it around June 30 each year, when the energy companies change their rates.)
If you’re reviewing your mortgage you may also find that you can get an equity release and use that increase in equity to buy an investment property somewhere like Newcastle where you can buy house and land for less than a 1 bedroom unit in Sydney!
If this sounds like a good idea, check out our
- Current Opportunities, or
- make contact and find out what investment properties are available in Lake Macquarie, Newcastle and the Central Coast.
Mortgage brokers only get a commission on loans written
Reviewing your home loan with a view to refinance is fairly simple, even more so if you get in touch with a mortgage broker to help you. (If you’d rather the DIY approach, there’s lots of home loan comparison tools available online.)
A mortgage broker only gets a commission when a loan is written. Just like a real estate agent, their job is to work hard at getting you the best rate based on your financial position, in order to get paid.
All you need to do is make sure to have all your paperwork in order, so it’s easy to supply them to your broker when the time comes.
So remember: Review your home loan as often as you would your utilities — every one to two years, or whenever your circumstances change. You don’t need to change brokers either because they earn a trail commission so it’s in their interest to make sure you’re in good order.