“Almost one in four Australians haven’t changed their mortgage for at least 10 years, new data shows.”
Domain.com.au recently published an article of The Australian Mortgage Council’s latest home loan report which includes the results of a survey by the RFi Group. The survey of 2023 mortgage holders, shows at least one in four people (23 per cent) have not changed their home loan in the past 5 to 10 years. About half of those (52 per cent) have not changed their home loan because they are satisfied with their current loan and have no reason to refinance. A further 22 per cent of mortgage holders say they have never considered refinancing. HSBC Australia head of mortgages Alice Del Vecchio believes people should review their mortgage whenever their circumstances change or about once every year or two.
“Most home loans are typically set up for 25 to 30 years – a lot of things can change in that time. You need to have someone review your loan regularly to see if it best suits your circumstances.” (domain.com.au)
The RFi survey shows that the reason why people are highly likely to refinance or have switched lenders in the past six months is most common the motivation to access lower interest rates (35 per cent), followed by the desire to reduce their monthly repayments (24 per cent) and, because they are generally dissatisfied with their lender (24 per cent).
“Del Vecchio says people often come into the bank to talk to their banker about a change in their circumstances. There’s usually a trigger, such as a change in employment. They might be taking six months off work to have a baby and simply want to change their repayments. Or, they might have changed jobs, are earning more money and want to increase their repayments. Sometimes they come in with one idea, and walk out with another plan after discovering options they hadn’t considered or didn’t realize existed.” (domain.com.au)
Refinancing your home loan can bring benefits including:
- Saving your money in the long run with a better rate
- Help you to consolidate multiple debts onto your cheapest rate
- Gives you the option to pay off your home loan faster if you decide to change your term
There are no rules on how often you can refinance your home loan. You still need to meet the credit requirements of the lender including the usual credit history, income and assets criteria you had to pass to get a loan in the first place.
Things to consider before changing your home loan:
- Be aware of costs that come with refinancing like loan application fees for new loans, mortgage discharge fees, or break costs if your home loan has a fixed rate.
- Lenders Mortgage Insurance (LMI) – If you have less than 20% equity in your home, you may have to pay Lenders Mortgage Insurance. This is because you cannot transfer the existing LMI to the new loan, despite the fact that your previous lender is no longer at risk.
Let us help you!
With interest rates at their lowest levels in decades, it pays to check whether your current home loan is still right for you. It’s a time consuming task that many people put off, even though they may have the potential to save significant amounts of money.
At Option, our primary concern is: how much money we can save you. That means we work extremely hard to make sure we find your best loan option, check on your current home loan and let you know whether you could save by switching. If you do decide to switch, we’ll do all the legwork for you to make it as easy as possible.
The cost of this consultation is 100% covered by us. Why? Because your future is important to us.
Every client we serve, we want to go above and beyond for. We want to make sure your financial future is secure – and if we do that well, you’ll be able to get your next property sooner.
How it works?
At Option Home Loans, we will meet you at a time and place that suits you. As soon as you contact us or book an appointment, one of our lending specialists will be into touch.
Make your life changing decision and contact us today!
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