How Long Have You Been Chewing The Same Bone?
With interest rates at record lows, now is a great time to check what you are paying on your biggest monthly outgoing. The average rate over past 30 years is around 7% – even when rates peaked in late 1980’s at 18-19%. So to get a rate below 5% even under 4% is fantastic.
We have had real success lately with clients. One couple was on a fixed rate for 10 years – at 8.44%pa. They had 2 years to go – but even with paying out the early repayment fee they were $17,000 pa better off over 12 months. This was an out of the ordinary situation but we have had many clients paying high 4’s who have refinanced into a rate at 3.75% and saved thousands per year. On a home loan at say $350,000 a saving of just .75% can be more than $2600 back in your pocket every year. That’s over $210 per month. And if you have ugly credit card or personal loans or car loans that could be wrapped up into one easy monthly payment – your savings and improvement in cashflow could be significant.
Of course we have to make sure that it makes sense. We are not about moving people away from their lender for the hell of it. We have a financial responsibility to ensure it is in your best interests, in terms of set-up, rate and repayments taking into account your financial situation now and into the future.
So make the most of these rates and get amongst it. It could be the best thing you have done for yourself for a while.
Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.
