We’re now into our fourth week of 2021 – how are your New Year’s resolutions tracking so far..? Have you kept up your commitment to head to the gym every week? Stayed on course to eating healthy or reducing your alcohol consumption? Spent less and saved more each week by reducing your discretionary lifestyle items? If the answer is yes, congratulations, you’ve done a better job than most.
This week our team at Loansuite is sharing some of our top property and mortgage resolutions for the new year to help you to make the most of 2021 and power ahead with your personal finances.
Existing homeowners and mortgagees
- Pay off your loan faster AND smarter
If you already own your own home and have a mortgage attached, use this low-rate environment to start paying off more of your loan faster, but consider doing so with your offset account. Calculate your minimum repayment and direct this into your main loan account, and then redirect the excess into your offset account. This will allow you to retain control of these funds, and still, reduce your interest expense and ensure that you can wipe out that home loan faster and speed up your homeownership journey.
- Ensure that your interest rate is competitive
The RBA has slashed the cash rate in Australia multiple times over recent years, so this can be a great time to review the interest rate on your mortgage and consider refinancing. If your loan starts with a 3 or a 4, chances are you could be saving thousands each year by refinancing. The most competitive interest rates are usually reserved by most lenders for new customers, while many existing customers are simply sitting on the ‘revert rate’, which is far higher than it needs to be.
- Get your cash flow right with your offset account
If you have one or multiple offset accounts, ensure that your salaries and other income payments are regularly deposited into this account. This will mean that even if the funds from your salary are only in the account for a short period, you’ll still be able to get an interest saving.
- Utilise lazy equity if it makes sense for you
As your property increases in value and your mortgage increases, the value of your equity also rises. You could look to utilise this equity to either negotiate a better rate with your lender in some cases or even access the equity to expand your property portfolio and buy your next asset. If your property is worth $1 million, and your loan balance is only $600,000 for example, you may be able to access $200,000 as equity in the property, which could cover the deposit and purchase costs on your next property.
- Improve the value of your existing property
If you’re somebody who’s quite handy around the house or has a creative eye, this could be a great opportunity to improve the value of your property with a renovation or upgrade. A well-maintained property adds value when it comes to selling or even having the property valued to access equity.
First home buyers and investors
- Check out your borrowing capacity
Cheap money and no ability to spend our salaries on global travel on the horizon can be a great opportunity to consider getting onto the property ladder. The first step here is to reach out to your lender or mortgage broker and assess how much your borrowing capacity is to consider your options.
- Consider what grants you’re eligible for
With State and Federal Governments acutely aware of how important residential property is for the Australian economy, many states and territories are offering attractive incentives and discounts for first home buyers to get into the market. Do your research here and consider what funds you may be able to get your hands on, which may allow you to get into the property market faster.
- Save, save, save!
If you’re not quite at the stage where you’re prepared to buy your own home or investment property, use this as an opportunity to save more money. Review your weekly and monthly expenses, and remove any that you can live without. While not being able to travel, or catch up with all of our friends and family on a regular basis may seem like a bit of a drag, use this opportunity to boost your savings.
If you have any questions about your options or what goals you should be setting for 2021, reach out to our mortgage broker team at Loansuite.
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 an 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.