News.com.au recently reported that comparison website Mozo has told borrowers to urgently consider reviewing their home loan.
This announcement is on the back of ‘rock-bottom deals’, with more than 60 lenders around Australia offering rates at below 4%.
On top of this, the Reserve Bank of Australia (RBA) announced on Tuesday that the cash rate would remain at 1.5%, setting a record for lowest consecutive rate announcements.
If you have a home loan or an investment loan, here’s how you can take advantage of this unique situation.
It may sound confusing and time consuming, but reviewing a loan is actually an easy and surprisingly straightforward process.
A home loan review involves visiting a mortgage broker (or lender, if you prefer to go direct) and asking them to compare your existing home loan with other products on the market.
If a home loan product with more suitable features exists, they will recommend it to you, and organise the change from your existing loan to the new one.
This entire process is called refinancing.
According to Mozo, the average variable rate across the Big 4 Banks is 4.64%*. This is 1.2% greater than one of the lowest variable rates offered by a non-major lender on their database.
Mozo also told news.com.au that borrowers paying off a $300,000 loan over a term of 30 years could potentially save around $75,000* in interest during the life of their loan.
* Head here for sources on the above data. Current as of 30/8/17.
The incidence of low interest rates in the market right now is what has prompted the recent influx of news articles on refinancing.
When it comes to finding a suitable loan, a good interest rate is very important.
But it’s also important to choose a home loan that matches your lifestyle, budget and finance goals.
This is where a mortgage broker steps in.
A good mortgage broker considers your entire story, and recommends a home loan product that fits within all of the factors we mentioned, including interest rates.
Unlike the banks and other lenders, they don’t have an allegiance to a specific home loan product or series of products.
In this way, they can compare a broader spectrum of home loans, and then pinpoint one that truly matches your goals and saves you more.
By way of example, we have access to more than 30 lenders and hundreds of home loan products.
A bank may only have access to a handful of loan products, and has a vested interest in ensuring your choose one from them.
A broker has an interest in getting you the most effective home loan product. They want you to be happy with their service, and come back next time.
A mortgage broker champions your interests.
Most mortgage brokers offer home loan reviews free of charge. (At least we do.)
They should handle the paperwork, and organise for the loan to be changed over from the old lender to the new one.
This is why the process is surprisingly easy, as you do not have to do any legwork.
When the new loan is settled, the lender you choose pays the mortgage broker a commission direct. There are no hidden fees.
The lender is paying the mortgage broker for the paperwork they would have had to do internally.
Contact Capita and ask about a home loan review. Our brokers can come to your home or office, or you are welcome to visit a Capita Finance Solutions office near you.
We can connect you with a mortgage broker that is right for you. Or if you have an existing Capita broker, simply contact them direct.
Get started now.