This is another question I am asked most weeks.
Last week in early discussions with a new client and their future plans we started by reviewing their current loan. The clients want to move home (do they sell then buy, or rent out existing and buy?) and are assessing their options over Christmas before maybe making a decision sometime in 2019. We spent 30 minutes working on their existing loan and "working over" their existing lender to get a rate reduction of 0.93%! If this client does nothing more, this saves them $56,000 in interest over the remaining term of their existing loan.
We will move on to help these clients further with their lending as they make decisions for 2019, but the “quick hit” and immediate savings on their existing loan highlights one answer to “should we fix?”. What most people should be doing is engaging a professional broker to do work for them and in their best interests, at no cost. And to look after you over the long term and ensure you reap the benefits of a low interest rate over the life of your mortgage.
Interest on your home mortgage will be one of the biggest costs over your lifetime to your household budget, but as it goes largely unnoticed, it is an uncomfortable topic easy to avoid discussing. We have confidential discussions with clients all the time… and it really is painless (and costs you nothing).
On interest rates generally:
1. the last increase in RBA official interest rates was in November 2010
2. the last change in RBA rates was in August 2016
3. quite possible we may see a whole generation of mortgage holders who go an entire decade without an official rate rise
4. despite RBA moves, there have been many banks moving interest rates independent of the RBA ("out or cycle rate rises")
5. the introduction of competition via mortgage brokers has seen banks interest margin (profit margin on interest) reduce by over a third.
For more information on any of your finance needs, please contact Dieter on the details below:
0438 211 211
firstname.lastname@example.org | www.theloanbroker.com.au