Being aware of your interest rate can save you money in the long term. As the official cash rate and other financial conditions change, it’s possible that your interest rate is no longer the best it could be. Therefore, it’s important to regularly review your mortgage.
So, when exactly should you reconsider your interest rate?
At the end of your fixed or introductory period
If you have a fixed loan, your rate will revert to variable at the end of the set period. This could be a good thing – variable rates have the potential to be much lower than a fixed rate. However, they can also be higher.
When your fixed period is about to expire, it’s important to ask your mortgage broker if you should refinance to a better rate.
When you need tighter control over your finances
Conversely, a variable loan may be causing too many fluctuations in your finances. This may be especially problematic when you have more urgent debts to pay off.
Switching to a fixed rate loan may or may not save you money – that simply depends on how the current variable rates compare to your fixed rate. What is guaranteed with a fixed rate, however, is stability. Budgeting around other debts or loss of income is easier when you know exactly what you’ll be paying month to month.
When it’s been some time since your last review
Optalife financial planners recommend assessing your mortgage at least every 2 years. Leaving it any later may mean that you end up losing significant amounts of money to lenders.
Find out if you’re getting your ideal rate
For help in finding your ideal interest rate and loan structure for your situation, get in touch with our team of loan specialists today.