In this article:
1. Take charge of your mortgage
- Speedup homeownership by paying in more: If your mortgage is older than a year, there is a healthy gap between what you can afford to pay and what you are currently paying. This is so because banks test an applicant’s ability to repay a mortgage at a ‘test rate’ which is usually higher than the rate the loan is settled at. If you are financially secure, use this opportunity to pay in more.
- Ensure that your rate is competitive: The RBA has revised the cash rate multiple times. However, it is the lender’s discretion to pass on the rate cut to clients. Lenders who do pass on the rate cut, usually offer the most competitive rate to new customers. Regularly check your home loan rate to ensure that you are being charged the same rate as new customers. If you find a gap, have a discussion with your lender. If your lender’s rate isn’t competitive, rely on a mortgage broker’s professional advice to find the most competitively priced product for your needs without compromising on essential loan features.
We have you covered on all stages of your property journey
- Leverage your property equity: The interest rate you are charged is inversely proportional to your property equity. Property equity is nothing but the difference between your property’s current value and the amount you owe your lender. If your property is valued at $500,000 and you owe your lender $300,000, your property equity is $200,000. As the value of your property appreciates, your equity increases. An increase in equity puts you in a position to negotiate a better rate or leverage your equity to gain more funds.
2. Consider Getting on to the property ladder
- Historically low rates
- Flatlining property prices that are now gradually beginning to rise
- Great government schemes and incentives to support first home buyers.
- Better savings due to no daily commuted and eating out (plough back your savings into your first home loan deposit).