Navigating lower interest rate mortgage deals, or renegotiating them, is never easy even if you have done it before. New rules come out, new packages come out and only specialists, like our Simpler team, can spend the appropriate amount of time tracking ways to “beat” financiers at their “Dance Of The Mortgage Loan”.
Here are some of our top tips for achieving a lower interest rate mortgage.
Expiry Dates
Ascertain these details about your current fixed interest mortgage loan:
- Date of expiry
- Interest rate
The details should be on each statement or will be available on the lender’s online platform.
An important note to remember is that you will receive a notification two months or less before your mortgage expires so read each communication you get from your lenders or mortgage assistance companies.
You will need to work within the two months, or one and half months, to renegotiate a new rate if that is what your goal is. You could save money if economists are hinting at an interest rate rise.
Mortgage Goals
Write down your financial and mortgage goals before chatting with your advisor or starting your negotiation process. Are you looking to put the property on the market? Or is this your “forever home”? Do you want to build an investment property portfolio? This information is vital for your advisor.
Interest Rate Mortgage Options
Lower interest rate mortgages can be fixed for half a year to seven years whilst a floating rate moves with the Reserve Bank base rate. In the latter arrangement, you can pay off the loan without being charged a break fee.
A hedged bet that is being preferred by lower interest rate mortgage users is a two year fixed rate with the three-year option coming in as a second favourite.
Get Quotes
The wider you look for rates, the better your chance of getting a good one. Your mortgage advisor will be a big help with this task. Always negotiate as even small savings add up to big savings.
Revise Your Mortgage
If your fixed rate is expiring, it is an ideal time to restructure your loan. Choosing the lowest rate is not always the best solution so ask for advice on how to spread your risk, e.g. split your mortgage over two different expiry dates. This avoids a huge increase hit when an expiry date is reached.
Use The Simpler Mortage Match
Save tens of thousands of dollars using our mortgage match system.
You may think your fixed-rate has a fixed time period. You also may think you will be penalised for breaking the time period. However, the Credit Contracts & Consumer Finance Regulations state that your financier cannot profit from a fixed time period being broken. They can recoup a loss amount but not profit from it…they usually profit from it.
We work out a refinance, restructure and mortgage match solution and see which one suits you. On a $600,000 loan, we can save you $40k to $70k.
For the best advice on lower interest rate mortgages contact the Simpler experts and start saving TODAY!
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