The Reserve Bank has kept the nation’s official interest rate on hold for the twelfth consecutive month, and economists do not expect it to shift any time soon.
Despite the Reserve Bank’s freeze on the cash rate, lenders have been aggressively adjusting their home loan interest rates in recent months amid cutthroat competition and ongoing regulatory changes.
With spring just one week old, now is a good time to take a closer look at your home loan and save some money.
1. Check your current mortgage rate
Use our Compare Home Loans tool to see how your current mortgage rate stacks up against those offered by other lenders. If you have a great repayment history and are considered a low risk borrower, lenders will jostle among themselves for your business.
Be prepared to play hardball with your lender to secure the best mortgage rate.2. Check your loan structure
If your rate is fine, the next step is to ensure that your loan structure is working well for you. Does it offer redraw facilities for enhanced flexibility, or an offset account that enables all your spare cash to work against the loan principal until you’re able to spend it?
There may also be loan features that you’re paying for that aren’t needed. Hence, it’s always worth a second look.
3. Make additional repayments
The best way to make mortgage debt disappear more quickly is to make additional repayments. Just $20 a week can shave years off your loan, as well as tens of thousands of dollars in interest costs.
Check recent bank and credit card statements to see if you’ve been overspending in certain areas and can scale back your spending to help pay off your mortgage.
4. Get rid of unnecessary fees
As home loans can come with lots of unnecessary fees, it’s important to check your latest statements to work out just what you’re paying for. If you’re not happy, get your lender to explain the fees and demand a better deal.