With interest rates down this week and speculation that they could drop again in the coming months, this might be the perfect opportunity for borrowers to consider whether your home loan is working as best as it can for your needs.
Here are a few easy techniques borrowers can implement in order to take advantage of lower rates.
Refinance your mortgage: With interest rates starting to drop again and Australia’s lenders competing aggressively for business through sharp home loan pricing, you might find there is another product on the market that is not only better suited to your needs, but that boasts a lower interest rate, saving thousands of dollars in interest over the life of your loan.
Continue to make higher repayments: If your lender has passed on the two changes this year, chances are your mortgage repayments have dropped. But instead of lowering your monthly mortgage repayments, consider continuing to pay off the mortgage as though rates have not dropped. By continuing to make higher mortgage repayments, borrowers will find they are able to pay off their mortgage faster.
Make the most of an offset account: Those borrowers who make the most of their offset account and use it as effectively as possible, are able to significantly reduce the amount of interest they have to pay on their home loan. So, if you have recently received a pay rise or are expecting to receive a good amount of tax back at the end of the financial year, make sure you feed it all into your offset account as this will help you to offset the amount of interest payable on your home loan.
If you don’t have an offset account or are looking for other ways to pay off your mortgage faster, consider booking an appointment with your mortgage broker or financial planner to see how these lower interest rates can be used to your best advantage.