One of the few certainties in life is uncertainty, and this certainly applies when it comes to your mortgage and personal finances. By burying your head in the sand, or simply assuming that once you’ve obtained your mortgage you never need to review it again, you could be paying far more than you should be or overlooking some substantial benefits. For both Australian expats and residents, we would always recommend at least an annual review your finances, to ensure that the lender, loan structure and strategy remains appropriate for your own situation.
We’ve outlined below some of the key reasons to review your loan regularly.
- Interest rates can and will change over time
Despite the fact that we are at record low interest rate levels, in 2017 many of the Australian banks increased their rates quite significantly. This was also carried out independently of any changes to the cash rate by the Reserve Bank of Australia (RBA). It’s important to regularly review what rate you’re paying to consider if there are better options.
Ensure that your mortgage broker has access to a wide range of lenders and can therefore review where there are potential discounts. If you’re an Australian expat, then ensure that your mortgage broker understands this market well as some lenders are now starting to re-open the door to expats, which will lead to increased competition and potentially greater discounts for you as the borrower.
- Your personal circumstances can change rapidly
By reviewing your mortgage at least on an annual basis, you can ensure that the strategy remains appropriate for your own situation. You may have been married, had a child, received a raise or bonus at work, or planning to relocate elsewhere. There are many variables that could have changed in your life, which may mean that the existing loan structures are no longer appropriate for you or would benefit from some tweaking.
- Is the structure of your loan still appropriate?
You may have previously split your loan into fixed and variable components, to allow for such options as early repayments or the benefits of an offset account and it’s important to review whether this is still the best option for you. Particularly with the uncertainty for many Aussie expats of how long they will remain offshore for before returning to Australia, it’s vital to consider the overall structure of your loans and ensure that it remains appropriate for you.
- Should you be using equity in your existing properties?
Given the recent price performance in the Sydney and Melbourne property markets in particular, many may be considering whether they should be utilising some of this equity to help them to grow their property portfolios. Given that most median property prices across Australia have doubled over the past decade, it can be a valuable strategy to consider your options in this regard.
- You could be saving yourself money
It is often a far easier option to boost our savings by reducing our expenses rather than increasing our income. One of the easiest ways to do this is to reduce the interest rate that we’re currently paying on our loans, which is a direct saving and may enable you to reduce the principal component of your loan that much faster. It may also allow you to utilise these extra funds to add another property to your portfolio, pay off your primary residence faster or invest elsewhere.
Our team at Loansuite provides complimentary loan reviews to assess whether we can improve the financials of our clients. Feel free to book a complimentary appointment with our team to discuss how we can help you.
LoanSuite Pty Ltd is your lending partner for all of your home loan, investment property, business and commercial financing needs. With our wide range of lending solutions, expertise in financial planning and investment strategies, and extensive experience in working with both Australian residents and Australian expats, we are your partners for your lending needs.
Book a obligation-free, complimentary consultation here today.
LoanSuite Pty Ltd is an Authorised Credit Representative (Credit Representative Number – 494608) of My Local Broker (Australian Credit License – 481374). Important Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.