Did you know Australia has the estimated third most expensive housing market in the world? We sure didn’t!
Did you know that as many as 83% of us Highlanders are paying too much on our mortgages? Yup, Neither!
Those are some pretty epic stats, but with all this knowledge it’s believed that the vast majority of us mortgage holders haven’t refinanced our mortgages in over 12 months, and potentially a lot of savings are being missed.
So, here’s the deal, we spring clean our homes, making them nice and ready for the season ahead, so why not our mortgages as well?
No worries if you don’t know where to start [it’s a bit like the house cleaning, kitchen or bathroom first?]. We’ve scored some advice from our buddies at Loan Market Bowral on 7 helpful steps to get your mortgage fresh as a daisy.
1// Negotiate your rate
Another stat for ya! Apparently, as many as 82% of mortgage holders don’t actually know their current interest rate- wild. And with our mortgages taking up a big old chunk of the pay packet even a small change in your rate could make a difference to your bottom line. The cost-of-living rise or ‘Cozzie Livs’ as the youths call it, is taking its toll on many of us and with Chrimbo right around the corner every dollar saved counts.
The best way to go about negotiating that rate of yours is by chatting with a qualified mortgage broker. They’ll break down your options and can often help you find the best one to suit your needs and lifestyle and potentially save you some buckaroos in the process- perfect for the summer party season.
2// Switch your payment frequency
For lots of us, monthly mortgage payments are the norm but by switching to fortnightly payments you can save some moolah. When you switch from monthly to fortnightly you end up making one whole extra repayment in the year- woah maths!
Basically, if your payments were something like $2,500 a month that adds up to $30,000 a year but if you switched to $1250 fortnightly and times that by 26 fortnights in the year, that’s gonna total $32,500. Sneaky, right? You’re essentially slashing $2,500 off your loan annually, and it’s like setting aside an extra $48 each week. Plus, every extra buck you pay directly chips away at your principal, reducing those interest payments and getting your mortgage paid earlier.
An experienced mortgage broker will be happy to help you set this up so just give them a buzz to get that mortgage spick and span.
3// Up your payments if possible
It can be pretty daunting when you start making those initial mortgage payments but as time goes on and you get into the swing of things the pressure might start to ease off. Maybe you snagged a few pay raises, your local business boomed, or you scored that dream job with the killer bonus package.
Now, while we love those extra perks and the extra cash in your pocket to spend at our lovely local shops and restaurants, consider this: a slight bump in your mortgage payments during these pivotal moments can work wonders.
So once again get your broker on the phone, let them know your plans and they’ll step you through getting it set up. It’ll probably take less time than you think- likely less time than having to clean the leaves out of gutters.
4// Consider an offset account
Here’s something to get your noggin around. When you opt for a standard variable loan, it means your interest rate isn’t set in stone. The good news is, that you can throw your income and savings into what’s called an offset account. Think of it as a sidekick to your loan account, working its magic in the background.
This offset account then teams up with your home loan and when the interest charges are calculated daily, it shaves off the balance from your outstanding home loan principal.
To get this going find lenders who offer 100% offset, and be mindful that there might be some T & Cs around the process so, again your best bet is to speak to your mortgage broker as they’ll know their way around the fine print.
5// Use your home equity wisely
Make sure to investigate whether your loan offers a redraw option, allowing you to withdraw any extra payments you’ve made. If you’ve started making those additional payments, we talked about earlier but have worries about rainy days, a loan with redraw provides the peace of mind you need.
This lets you add as much cashola as you can towards your mortgage, effectively reducing your interest and speeding up that mortgage payoff. However, you can still access the funds through redrawing if needed.
Just be aware that many lenders have a minimum redraw amount plus fees for use so check the costs before making a move. Mortgage brokers are a great source of advice and info on this, so keep yours close.
6// Keep an eye out for sneaky fees
Putting up with unnecessary mortgage fees is soooooooo two thousand and late. The year is 2023 and we’re on top of the fees we need to pay and we’re down to negotiate. There are so many different types of fees your lenders may be willing to reduce or even remove if you take the time to level with them.
Look, this is one of the trickier tasks on this list, there are loopholes and fancy lender talk to navigate. That’s where your trusty mortgage broker comes in. They’re the seasoned sailors of the lending seas, tackling this stuff day in and day out. So, get them on board, and set sail.
7// Get informed
It sounds simple but it is really important to stay educated and up-to-date on everything about your home loan. Knowing your current interest rate and your loan balance is mucho importanto and it’s best to have this information presented in a clear and easy-to-understand way.
Just like cleaning out that cluttered pantry, make sure your lender isn’t overloading you with unclear info or hard-to-read systems. Believe it or not, a good mortgage broker can even provide recommendations on which lenders have the best easy-to-read info. Who knows, they might even have some tips for sorting out that chaotic junk drawer!
So, we’ve got our Mortgage spring cleaning list together, it’s time to get those rubber gloves on [figuratively of course] and get that mortgage squeaky clean.
Get on the blower with the team at Loan Market Bowral and make sure you’re no longer one of the 83% who might be getting a raw deal on your mortgage.
The team have an impressive record when it comes to helping locals throughout the Highlands refinance their mortgages. Just check out their 200+ 5 star Google reviews!
The Highlands are about to have the most spotless mortgages around!
The Loan Market Bowral team is committed to helping locals secure the right loan for their immediate and future goals – whether that’s for a first home, third investment property, refinancing, business investment or buying a new car. Excellent customer service is the core priority and are always happy to chat to Southern Highlanders keen for lending advice and expertise.
Contact the team via their website here or call the office on 4862 1215.
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