When it comes to reducing the cost of your mortgage, there are several factors that you need to consider. The following points will help you identify where you can save money on your mortgage.
Check your loan term - with interest rates having been at historic lows over the past few years following Covid-19 and a hot property market, many of our clients increased repayments (or the portion of their repayment allocated to paying back principal) and hence have been paying more than the minimum repayments. Often if the pressure is on and repayments have jumped up with increases to rates, we can reduce your repayment and extend that loan term out again.
Interest only - for a while banks have been hesitant to allow interest only (i.e. no principal repayments) on lending for your personal home (the place you live). They now realise that for some customers, interest only repayments will reduce the financial pressure as rates increase and allow them to get back on their feet. We've been achieving really good results in this space, so touch base with us if you'd like to discuss further
Reviewing structure - many loan structures are set up usually for a period of a few years, and sometimes some simple tweaks can make it slightly easier to get through a period of more expensive rates. It's a good idea to review your structure every 1-2 years, and make changes in line with your family situation, income and lifestyle.
Refinancing - banks can be fickle and also currently change policies and lending requirements often. Sometimes the bank which was the best fit for you 5 years ago might not be quite right for you now. Every situation is different, and with rises in rates, plus some significant cash offerings, we're having some excellent results for our clients who are keen to explore some different options
Budgeting - this is something we've harped on about for many years and are quite geekily excited about. No one loves a spreadsheeted budget more than us and we've even got a template for you based on your preference of weekly, fortnightly or monthly, which you can find here. Our advice is to group expenses into essential (mortgage, rates, insurances, food, power, phone, etc), moderate (kids activities, eating out/socialising, clothing, etc), and "nice to haves" (holidays, new appliances, and other discretionary items)
Reducing the pressure of increasing repayments requires careful consideration of your options. By considering the above five options, you could make your repayments more manageable. Remember, it’s totally free to seek our advice before making significant changes to your mortgage so please feel free to touch base and chat through the options with one of our experienced advisers.