Lately I’ve been doing some Q&As with our Tamworth and New England
customers, answering their questions about mortgages. I’ve noticed a
number of mortgage myths
and misconceptions that keep coming up, so I thought I’d address the 8 most
Once I find a
good rate, I’m sorted for the life of my loan. Lenders can move their variable
mortgage rates at
any time, so a loan that’s competitive today might not be competitive in the
future. It is a good idea
to visit your mortgage broker once a year to get a review and see if your rate
is still competitive.
2. It’s not worth refinancing a mortgage for
an improvement of half a percent. If you have a $350,000, 30-year loan with
an interest rate of 5.24 per cent, and you refinanced to a rate of 4.74, you
would save $107 a month and $38,480 over the life of the loan. Imagine the possibilities!
rate doesn’t really matter because the Reserve Bank controls home loan rates.
The RBA adjusts the cash rate from time to time but each lender can change
their rates as they see fit.
refinance a fixed-rate loan. Not true. You can refinance a fixed rate loan
but you’ll be hit with a break cost, which is compensation for the loss the
bank will incur when you leave. Weigh up the break costs versus the potential
savings and see what you come up with. As your local mortgage broker in the Tamworth area, we
can easily these sums for you and see if you would come out ahead.
I want to use a
mortgage broker but what about the fees? Mortgage broking fees are paid by
the lender, not by you. A mortgage broker finds you the best loan at the most
I’m too old to
refinance my mortgage. Age discrimination is illegal. A bank looks at your
repayment ability, so they’re looking at your income and the loan term. If
you’re close to retirement, you can look at shorter loan terms or alternative
7. Many people in the New England
area are self employed or business owners and say they pay a higher mortgage
rate because of this. If you’re self-employed and can’t produce your
tax returns, you may be offered a low documentation loan which can have higher
interest rates. If your financials and tax returns are in order, you qualify
for the same rate as a regular PAYG employee.
8. Banks keep
secret files on my credit history. Wrong. All lenders use a credit
reporting system to check your history. Know what they know by finding out your
history at www.mycreditfile.com.au.
Sweeney’s Top Tip: Be Informed
is the key to getting the best deal. If you need any advice, as your local
Yellow Brick Road Tamworth Mortgage broker, I can understand your situation and
get you on the right track. So make sure you make an appointment at our Tamworth
branch or give us a call so we can help you save on your mortgage.