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When is a Good Time to Review Your Mortgage?

When was the last time you reviewed your mortgage?

Shopping around can help you increase your savings or shorten your mortgage term, and you can even consider switching between a fixed or variable rate depending on what the lenders are offering you.

Although you should look to review your mortgage yearly, there are other times when a review will be beneficial due to outside circumstances, as well as to ensure the product you are signed up with is still the right fit for your needs.

Personal Changes

Have there been any personal changes in your life since you started your mortgage, such as a promotion, starting a family, or getting married? It can be beneficial to review and revisit the features that are provided with your mortgage to see if there is anything you are paying for that you do not need, or any features that you would like to take advantage of that are not currently part of your loan. For example, if you plan on starting a family and would like to take time off work, a repayment holiday would be beneficial to have as part of your loan.

Another great time to review your mortgage is at the end of a fixed loan period. It is not advised to refinance during a fixed-rate period because of the potential break cost, however, at the end of this period, your loan generally moves to a variable rate and as such is a good time to shop around.

External Changes

Apart from personal changes, keeping an eye out for what is happening externally can help you increase your savings. A change in the RBA cash rate is important to follow as the cash rate helps lenders determine their variable interest rates. Although the lenders do not have to follow the changes to the cash rate from the RBA, keeping up to date on how your lender responds to the changes can help you decide if it is a good time to refinance.

As mentioned, lenders are not required to follow the changes in the cash rate by the RBA, and in most variable rate loans there can be out of cycle rate increases at your lender’s discretion. In addition, these rates do not need to be formally announced by your lender. Make sure to check your monthly statements closely and if you see your monthly rate creeping higher, it would be a good time to review your mortgage and consider refinancing with another lender.

If you’re looking to refinance, or just want to review your options, get in touch with us today to see how we can help improve your savings and get you a better deal on your current loan or mortgage.