Interest rates are in the news almost every week, so it makes sense that a lot of homeowners aren’t sure what to do with their home loan right now.
I recently worked with a couple in Helensvale on the Gold Coast who knew they were paying more than they needed to. They wanted lower repayments, but they were also nervous about where rates might head over the next few months.
We could have just moved them to the sharpest variable rate we could find. Instead we looked at how to set up their loan so they’d get some certainty without losing flexibility.
Where they were at
They’d been with the same lender for years, and their rate had slowly drifted away from what new customers were being offered. They were open to refinancing, but they didn’t like the idea of having the whole loan on variable. They also didn’t want to fix all of it, because they relied on their offset account and didn’t want to give it up.
Splitting the loan
After going through their finances and comparing lenders that suited them, we split the loan into two parts.
One part went onto a fixed rate, so they know exactly what those repayments will be for the fixed term. The rest stayed variable and is linked to an offset account, so their savings keep working to reduce the interest on that part of the loan. If rates move, they aren’t fully exposed either way.
How it turned out
Moving to a more competitive lender brought their interest costs down, and the new structure fits the way they actually manage their money. Part of their repayments is locked in, and they still have room to move with the variable portion.
For them, a cheaper rate was only part of it. What mattered was ending up with a loan that suits how they live.
Is your home loan still competitive?
If you’ve had the same mortgage for a few years, there’s a fair chance your rate has fallen behind. Sometimes a pricing review with your current lender sorts it out. Other times moving to a different lender makes a real difference.
At The Broker Society I help homeowners in Helensvale, across the Gold Coast and further afield review their loans and look at their refinancing options and debt consolidation options. Whether you’re thinking about fixing, staying variable or splitting the two, I can walk you through what each option would look like for you.
Make an Appointment for a home loan review.
General information only. This is an example of a real client scenario with identifying details removed. Loan products, offset features and eligibility vary between lenders. Fixed rate loans may have restrictions and break costs. All lending is subject to lender assessment and approval.
