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At Yellow Brick Road Schofields we are always looking for ways to save you money, and one of those places is your mortgage. People often forget to look at their mortgage which ends up being one of their biggest household expenses. Why? Well, I believe the reason why people don’t look closer at their home loan is because the idea of refinancing seems too difficult, too confusing, or is perceived as probably not worth it for the effort. If you’re one of those people, it’s time to ask yourself some questions.
What’s my rate? In my experience, many people know what their monthly payments are, but they don’t actually know their interest rate. Do you? Take a look – if it starts with a “5”, you can probably do better and I’d advise speaking to one of our mortgage brokers to help you shop around.
What does the market say? Use a comparison site and find out what’s on offer. The current market for variable rate mortgages runs from high 3% to over 6%. Most 3-year fixed rate mortgages range from 4% to 6%, which is a substantial difference for potential savings.
What could I save? Use comparison sites to calculate several results. If you have a $350,000, 30-year loan with an interest rate of 5.24%, and you refinanced to a rate of 4.74%, you would save $107 a month and $38,480 over the life of the loan. Don’t have time to calculate this yourself? Well, there’s no need to because our experienced mortgage brokers at Yellow Brick Road Schofields are more than happy to help you out!
What must I have? Have a good repayment record with your current lender and ensure you are not currently in arrears. Also, know that if you’re half-way through a fixed-rate loan you may be charged a break fee to leave. So, make sure it’s worth it.
What are my other costs? A new lender will likely charge upfront fees, and there may be some costs to exit your mortgage. Also, if you have less than 20 per cent equity in your new loan, you’ll pay lenders mortgage insurance, which increases your costs.
Who do I see? Make an appointment with one of your Yellow Brick Road mortgage brokers. At Yellow Brick Road Schofields we have a wealth of industry knowledge as well as access to a whole panel of lenders and products, so we have the skills are resources to get you the best deal possible.
How long will it take? We will give you a run-down of the process, the application, the documents they want you to provide, and the time it typically takes.
Is it worth it? You must answer this yourself. The total interest paid on a $300,000, 30-year mortgage at 5.6% is around $66,000 more than the same mortgage at 4.6%. You have to decide it this is worth the effort of refinancing.
If you still have more questions regarding how you can save on your home loan, then make sure you either drop by our Schofields branch or give one of our friendly mortgage brokers a call.
We have you covered on all stages of your property journey