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Your mortgage/ home loan might be one of the largest financial commitments you’ll ever make, so there are definitely many reasons for you to ensure that you don’t pay more than you should. While most borrowers may get fixated on low rates, there are many other important points that you should consider to ensure you get the best deal you can. Here, Easyrates highlights 4 reasons why you’re probably overpaying for your loan.
Not Taking Advantage Of Related Bank Products
Most of us have a preferred bank that we use, knowing this, many banks have cleverly rolled out products that hook us in with sweet deals when you increase your overall banking relationship with them. Essentially, these are banking products that tie your home loans to a deposit account with the bank where the interest you earn on your account will go towards offsetting the interest payable on your home loan. By taking advantage of your existing banking relationship with your preferred bank, you may be able to find loan packages that offer you special rates you probably wouldn’t be able to match outside.
Only Looking At The Initial Rates
Many home loan products come with an initial lower interest rate during a lock-in period. Some borrowers make the mistake of only focusing on the cheaper rates for the first 2 – 3 years without considering the fact that their loan term may stretch as long as 35 years. Ask for a repayment schedule from your bank to get a clearer idea of how much interest you will be paying for the entire loan term. Don’t be taken in by what looks like a nice affordable payment, only to be shocked many years later when your rates shoot up.
Not Refinancing/Repricing
Refinancing is essentially a way to move your current mortgage to a new bank to reduce your monthly repayments. You should consider refinancing your home loan after the lock-in, because there is most probably a better deal to be found after the lower, teaser rates you are paying during the lock-in period end.
Start looking around about 6 months before your lock-in period is up so that you have some time to do some research, as banks typically require a 3 month notice period to redeem the loan. If you are quite sure that you are going to reprice your loan sometime later, look for loan packages which comes with free repricing so that you can save up on some of the administrative fees that may come along with it.
Undertaking The Recommendation Of Your Property Agent
Before you sign up for a mortgage/ home loan, remember that it’s a long-term financial commitment, so it’s most likely worth your while to spend a bit of time to find out more about a loan package you may be interested in on the 4 factors above to help you pay the right price! Package that you’re interested in. Talk to the mortgage experts at EasyRates for free, unbiased advice on the best home loan for you and save yourself tens of thousands of dollars today!
Before you sign up for a mortgage/ home loan, remember that it’s a long-term financial commitment, so it’s most likely worth your while to spend a bit of time to find out more about a loan package you may be interested in. If you think we left something important out, do feel free to leave a comment in the section below! Love this article? Share it on Facebook! Think we’ve written something awesome and want to get more awesome updates? Subscribe to our Email Newsletter! or like us on facebook!
Talk to the mortgage experts at EasyRates for free, unbiased advice on the best home loan for you and save yourself tens of thousands of dollars today!
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