How to: Lower your mortgage repayments when you are already on a budget.
It is expected that the Australian economy will to continue to soften as the mining boom proceeds to slow, and unemployment rates are on the rise. For the majority of Australian’s, hearing ‘higher mortgage repayments’ is enough to send them into a panicked frenzy. While rates are currently low (thanks to the RBA’s decision to keep the cash rate on hold at 2.0%) we have devised a few more ways that you can make big savings on your mortgage repayments.
4 tips to help you save on your mortgage repayments.
1. Call your bank manager and ask what they can do for you
Banks spend millions of dollars every year on advertising to win customers, so it pays for them to be good to their existing customers. Use this power to your advantage and call your local bank manager and ask what they can do for you. It pays to do your research, why not check out the products they have on offer and compare your current rate to them? Ask them to rate-match a closer competitor or provide extra’s to keep your custom.
2. Make your repayments on a weekly basis
The concept is simple: The more often that you make your repayments, the smaller the amount is that you will repay on interest. Even the smallest changes can make notable differences, once put into perspective. What may seem like a few dollars or cents now may add up to be a significant amount over time.
3. Open an Offset Account, and use it
One of the best ways to reduce your repayments is by opening an offset account. This acts as an everyday transactional account that reduces the amount of interest that you pay on your home loan. One of the many benefits of having an offset account is that they don’t earn compoundable interest, so you won’t be charged tax on it.
4. Refinance your mortgage
Compare your current loan to the rest of the market and put it to the test to see if it measures up the the offering of other lenders. You may find that another lender is offering a better product than your current provider. Use the SwitchMyLoan service to compare quotes between lenders and determine the savings you could be making on your home loan.
Investors take note: APRA has introduced regulations that have compelled the big 4 banks to introduce higher interest rates for borrowers with investment lending. This has left smaller banks and non-bank lenders (credit unions etc.) with an opportunity to provide extremely competitive rates for those with looking to buy or save on their investment portfolio. SwitchMyLoan is able to provide competitive quotes between lenders who are not affected by APRA’s recent regulations. Enquire now for free quotes to see how much you could save on your repayments.
The important thing to remember with savings is that like all good things, they take time. Make informed decisions that are right for you and your unique situation. Often the best changes you make are ones that help you to save over time.
To speak to a money saving expert about your options or for free quotes to help you save, visit SwitchMyLoan.com.au or call 1300 307 155.