Saying 2020 has been a 'year of uncertainty' is a gross understatement.
With the rise of COVID-19, everything from travel to popping in to see a friend has changed. However, as the restrictions begin to lift across Australia there is still one enormous looming threat:
According to data from the Reserve Bank Of Australia (RBA) unemployment will jump to 10% in June (from a previous forecast of 5.2%) and stay as high as 8.5% this time next year. Combined with current market sentiment, it's no wonder Australians are tighetening their belts.
There is some good news, however, for Australian home owners; with experts saying now is the best time to refinance their home loans - potentially saving them thousands a year in interest.
What is refinancing?
Put simply, to 'refinance' your home loan means you will replace your current home loan with a new one, from a lender who is prepared to offer better terms. Additionally, refinancing can also give you the ability to borrow extra funds for goals such as renovating, paying for emergencies or even debts and loans.
With the recent RBA announcement to cut interest rates to record lows (0.25%), it presents Aussie mortgage holders with the opportunity to get rates that have 'never been seen before'.
Whilst refinancing can be a 'no brainer' for some, a recent survey commissioned by Aussie Home Loans found that a staggering 78% of home owners weren't exactly sure what refinancing meant. Here's what in of our in-house mortgage brokers had to say on the matter:
'A lot of the time, the 'honeymoon' period (the advertised rate) on your mortgage wears off after 2-3 years. It's often pretty hard to find your interest rate - sometimes it's hidden on the statement so you don't know what it is.
We often get a lot of clients that want to stay with the banks...thing is, if you go to a mortgage broker, they have access to A LOT of different lenders, vs your bank which typically only have their own products. I know a lot of people are loyal to their banks, but the question I'd be asking is:
Would your bank be as loyal to you, as you are to it?' - Perry Walton, Chase Edwards
Who would get you a better rate?
Your Existing Lender or The 40+ Lenders Below??
How Much Can You Save With A Refinance?
Using a simple mortgage calculator (like the one on MoneySmart.gov) you can easily calculate your savings by inputting your remaining mortgage, and interest rate.
For example: On a $450,000 loan, a change of as little as 1% can save you up to $2808 (tax free) every single year in interest. And it gets even better - with many lenders offering 'Cashback' offers (up to $4000) just for refinancing with them!
So how can you get started? You've got 2 options:
- Research yourself, sifting through dozens of home loans, paperwork and figures to get the right loan.
- Finding a good mortgage broker.
Should You use a mortgage broker?
'Often we find that people are a bit hesitant to talk to a broker - they think there will be a free like with a financial planner or accountant, but there really isn't'
As mortgage brokers are paid a commission from the lender, you can engage one to find the best deal for your home loan, without any sneaky or hidden costs. This can save time, effort and energy - and give you someone to negotiate on your behalf, lodge the paperwork and have your back that you're getting a good deal.
Here at Chase Edwards, we have access to 5 qualified mortgage brokers who can help you get the best rate on your home loan.
For a 100% cost & obligation free mortgage assessment, simply enter your details through the form below: