There are many benefits to refinancing your home loan. One of them is the ability to choose a new loan with the features you want. When you decided to get your current home loan, you may not have paid too much attention to the features offered and may have missed out on saving valuable money.
Listed below are five features that may be able to save you on your mortgage. Every loan may not offer all of these features, but it is up to you to find the best loan to suit your situation in order to maximise the potential savings. So, before you refinance, take a look at the top 5 features to consider:
Free Redraw: This feature allows you to pay extra money into your loan in order to reduce the interest charges owing, however, you are still able to withdraw that money if you need to. Some loans offer a redraw facility, but you need to pay a fee every time you withdraw. Free Redraw can save you money as you are not incurring withdrawal fees every time you access your additional funds.
Direct Salary Crediting: Keep all of your money in one place by having your employer deposit your wages into your loan account. This way you can access your money from one place for everyday purchases and transactions. It will also reduce the amount of interest owing, allowing you to pay off your loan faster.
Offset Account: Similar to direct salary crediting, the offset account helps reduce the amount of interest owing on your loan, which in turn can reduce the loan term. It is a separate account that is linked to your loan but you can use it just like an everyday account to make purchases and pay bills.
Unlimited Extra Repayments: This feature gives people the opportunity to make repayments as often as they like. This will help you to pay off your loan as fast as you would like. It doesn’t matter how big or small the repayment is, every amount helps.
Portability: Some buyers are in the situation where they are going to sell a home and purchase another at the same time. Portability allows you keep your existing home loan when you buy and sell. This may be able to save you a lot of money on fees compared to getting a whole new loan.
This information was provided by State Custodians Mortgage Company. For more information visit www.statecustodians.com.au.