How To Compare Home Loans With a Loan Comparison Calculator
When it comes to switching your home loan, most Australian’s goal is to put themselves in a better financial position for the future.
Firstly, what is mortgage refinance? Essentially, refinancing is the process of rolling your existing home loan into a new one. When applying for a home loan, it seems logical to evaluate various interest rates to ensure you are getting the best deal. Over time, market conditions change, and the initial home loan package that you had decided on may have now lost its competitive advantage. This is where refinancing comes in; where you can switch your home loan to another lender in order to benefit from their offer – in most cases this includes reduced fees and rates, or better features.
Presently, mortgage brokers and financial institutions recommend reviewing your home loan for a better option at least once a year. New lender products could include options that help reduce fees and monthly repayment rates.
For those paying off a mortgage, it’s important to consider the possible savings that can be obtained through refinancing. The team at SwitchMyLoan found that customers who benefit the most from refinancing are those that ask about the personalised options available to them.
All Australian home owners are eligible for refinance, yet the difficulty is knowing which refinance option will put you in the better financial position. Home loan comparison calculators, like the one found here, have been used to demonstrate how two competing home loans can present very different outcomes with respect to monthly savings.
SwitchMyLoan put two home loans under the microscope with the only difference between them being the interest rate. We found that using the mean Australian house price of $669,700, with a 20% deposit, customers with a home loan rate of 4.90% could be paying as much as $131,498 more than they have to over the life of the loan in comparison to a rate of 3.74%.
Home Loan Savings Calculation
|Loan 1||Loan 2|
|Aus Median Home Price||$669,700||$669,700|
|Term||30 years||30 years|
|Regular Repayment Per Month||$2,843||$2,478|
|Total interest payable||$487,872||$356,374|
|Difference in interest payable||$131,498|
Switch Tip: Put your current home loan rate up against a potentially lower rate; you could be surprised by how much you could save.
It’s difficult to know whether you have the best home loan product without comparing what is currently available on the market. If you are looking to refinance or are just curious to see where you could save money, try our Home Loan Comparison Calculator.
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