Annual home loan health checks are essential.
Much the same as your annual check-up at the dentist, full service on your car, or spring cleaning. Annual reviews of your finances or home loan health checks are essential!
Australians are some of the most heavily indebted households in the world, primarily due to the size of our home loans. This means that a small difference in interest can result in hundreds of dollars a week extra being charged to you. Having an annual home loan review or check-up is so important to stop you from paying more than you need to. This active monitoring of your home loans can result in you saving tens of thousands of dollars over the life of your loans and can help you pay your loans off faster as well.
There is a common misconception that when you sign a loan contract for a house you are signing on for 30 years. This is incorrect and the banks rely on Australians not understanding the terms and conditions so that they can overcharge their customers. When you sign a variable mortgage, you are committing to meet your minimum repayments over 30 years. Customers can pay this loan faster than the minimum and the bank is allowed to change the interest rate as they see fit.
It is possible and often easy to change your bank!
Banks often offer a low-interest rate or a cashback offer to attract new customers. In the years following they slowly and progressively start to increase your interest rate. They get away with this because most customers are not actively watching their finances. Additionally, the process of moving your loan or refinancing can be time-consuming.
If you have gone through a mortgage broker for your loan they should be fighting for you for discounts every year. They can also investigate moving your loan to another bank to take advantage of promotional offers or cheaper interest rates (refinancing).
Mortgage brokers conduct annual home Loan reviews for clients.
When you first access your loan you are signing a contract at the worst terms possible for the life of the loan (assuming your always meet your repayments). This is because banks price your loan including premiums for the risk of the loan and the risk of you as a customer. So as long as you meet your repayments your bargaining power increases and your risk rating decreases over the life of the loan! This means banks should be offering you lower interest rates over time. In reality, they tend to increase rates over time.
Home Loan Health Checks for all!
We offer complementary home loan health checks for all. So if any of your mates are complaining about their home loan repayments increasing, tell them to give us a call, that’s what we’re here for!
Determining whether you’re on a good wicket with your home loan usually only takes us around 5 minutes in total and doesn’t require any documentation.
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General advice disclaimer
The information provided on this website is a brief overview and is general in nature. It does not constitute any type of advice. We endeavour to ensure that the information provided is accurate however information may become outdated as legislation, policies, regulations and other considerations constantly change. Individuals must not rely on this information to make a financial, investment or legal decision. Please consult with an appropriate professional before making any decision.
