The festive season isn’t just for gifts and celebrations—it’s also the perfect time to unwrap significant savings on your mortgage rate. As mortgage holders seek better deals before the holiday rush, even a 1-2% reduction in your mortgage rate can save you thousands of dollars annually. Imagine the extra cash for gifts, vacations, or reducing financial stress!
The past two years have been riddled with frustration for homeowners with rising mortgage rates and seemingly no end in sight. A low mortgage rate two years ago started with a 2 in front of it, which has now very quickly increased to a 5 to 6.
What is worse is that we’re seeing loyal customers to a bank getting lumped with mortgage rates of over 8%. If this sounds like you, it’s time you looked around to see what other options are available.
In simple numbers every 1% you’re being stung by your bank, is costing you over $5,000 a year on a half a million dollar mortgage. That is dead money that you could be using to improve your lifestyle, take some pressure of bills or investing in your future.
Remember there are also many additional features that you can access for your home loan to help either;
- Reduce your mortgage payments
- Pay off your mortgage faster
- Provide flexibility to renovate your home
And many more options.
Keep in mind that your property value has likely risen since you purchased your property meaning banks take a better view of your risk and price it accordingly (through a lower mortgage rate). According to Core Logic, property prices are increasing most capital cities.
Do you have an Offset Account?
A key way to save money and reach financial freedom quicker, lies in the offset account. An offset account is a savings account linked to the mortgage. With ‘tax free’ interest earned at the same rate as the debt incurs, it provides a unique advantage. For instance, with a $500,000 loan and $50,000 in the offset account, interest is calculated on only $450,000, offering financial flexibility without sacrificing accessibility.
Why Speaking to a Mortgage Broker Works
Banking is a competitive space and no one knows this better than a mortgage broker. Also, everyone’s circumstances are slightly different, which means the rate one person may get at ANZ for example, is going to be different to what someone else may get. This could be as a result of self-employment, income, equity, the value of property around you. A mortgage broker will help you navigate through the ins and outs of the best bank for you to mortgage refinance with.
Fixed vs. Variable Mortgage Rates: Which One Is Right for You?
Choosing between a fixed or variable mortgage rate depends on your financial situation:
- Fixed Rates: Provide stability and peace of mind, ideal if you expect interest rates to rise.
- Variable Rates: Offer flexibility, especially when combined with extra repayments or an offset account.
Consider where interest rates are heading to make an informed decision.
So, should you Refinance your Mortgage?
Refinancing, does carry a caveat… The temptation to extend the loan term to minimise monthly payments. This results in a higher overall cost to repay your mortgage in some instances. To avoid this pitfall, you would need to align the new loan term with the remaining duration, obtaining full benefit of the lower mortgage rate. So, why wait? For those navigating the home ownership and mortgage landscape, the quest for an early Christmas present begins now!
Your Early Christmas Present: Lower Mortgage Rates with One Click Life
One Click Life can save you money by helping you find a mortgage lender that meets your needs. Save money on your mortgage by accessing a lower mortgage rate.
We have an expert team of mortgage brokers that can guide you through the process of selecting and moving lenders.
