It had been almost a year and a half since the cash rate moved, and that is a boon to homeowners. The newest rate change in February has given banks the means to pass on great rates to customers. It is an ideal time for homeowners to cash in on these rate changes and maximize it to their savings benefit. Your search should start with the list of lenders that have pushed their rates down to match the market, but you also can entertain remaining with your current lender and save where you are.
- Compare other loan products on the market
Your home loan was likely the best on the market when you bought or refinanced your house last year. The interest rate only needs to dip a half a percentage point make considering a new loan product a viable option. New deals are constantly being added to the market, and you only need to do a basic search to find out whether your loan is a rate of the past.
- Pay as Usual
It seems illogical to take advantage of the new cut in cash rates and remain with the same higher mortgage payment plan. The reason you’d want to keep paying the same mortgage is because you will shorten your repayment period. At the event of a rainy day situation and the need to access the cash later, you will be allowed to reach back into the cash stocked away in your home with a redraw.
- Stay where you are
Open a dialog with your current lender. After researching the market and finding the lowest rate for which you qualify, consider entering into a negotiation with your current lender. Not every bank has passed on the rate cut, and this means that they have room to move the rate to a certain position. You may not get what you ask for, but before you begin, calculate the amount of rate differential that would result in adequate mortgage savings for you. Some of the larger banks may not be willing to move on the issue, but you could be beginning steps to change your loan package.