Refinance

Home Loan Product Information

Your home is your biggest asset and also your biggest liability, so accordingly this should be the first place you look when trying to fix your budget, accelerate your ability to save or increase your disposable income.

Paying too much?

Most Australians are paying far too much for their mortgages. For example, a 0.5% per annum discount may not seem like a huge saving but a discount from 4.5% to 4.0% on a standard home loan of $400,000 over 30 years is a saving of $2,000 in the first year alone. An overall interest saving of $42,148 over the 30-year life of the loan and will reduce your repayments by approximately $117 per month.

With interest rates at record lows, there has never been a better time to review your home loan options.

FAQ

WHY SHOULD I HAVE MY MORTGAGE REVIEWED?

As you may have read earlier, your home is your biggest asset and your biggest liability, so this should be the first place you look when trying to fix your budget, accelerate your ability to save and/or increase your disposable income.

If you haven’t had your home loan reviewed in the past 2 years, chances are that you are overpaying on your mortgage. This is quite common in the Australian market, particularly with customers of major banks who are on ‘discounted variable rate products’. With each move in the cash rate and cost of funding for lenders (fluctuating with the market) banks will typically raise interest rates for existing customers first, whilst usually keeping ‘new to bank’ business competitive. This can result in existing customers having their interest rates increase marginally, but consistently, and over time, add up to 10’s of thousands of your hard-earned money increasing banks profit margins.

We have found that our clients who haven’t reviewed their mortgage in the past 2 years are paying more than they could with a new lender. Whilst, for example a 0.5% per annum discount, may not seem like a huge saving at first a discount from 4.5% to 4.0% on a standard home loan of $400,000 over 30 years is a saving of $2,000 in the first year alone. An overall interest saving of $42,148 over the 30-year life of the loan and will reduce your repayments by approximately $117 per month.

With interest rates at record lows, there has never been a better time to review your home loan options.

WHAT IF I REDIRECT MY REPAYMENT SAVINGS BACK INTO MY HOME LOAN?

Whilst your bank may be charging you more than their competitors for the cost of your home loan, the repayments may have become habitual and you may want to redirect your extra $117* of new disposable income back into the mortgage, thus giving you a much greater interest saving.

By allocating this $117 of the banks money (due to charging you less) back into the mortgage as additional repayments’, you can pay off your loan over 3 years sooner and save an extra $34,226, coupled with your interest discount of $42,148, this gives you a total saving of $76,374.

Even if you’re financially savvy or you think you’re on a great product, it can help a lot to have an expert assisting you every step of the way, without charging you. We make it EASY.

*as indicated in the example in the Mortgage Review FAQ section (Savings and Rates quoted are indicative and depend upon the clients individual circumstances.

WE DON’T LIVE IN VICTORIA. CAN YOU STILL HELP US?

Our home loan experts help people all across Australia, we can assist people no matter which state, territory or city you reside in or are looking to purchase in. We even assist clients overseas wanting to invest in Australia, we just need to verify your identity and your details which is a normal requirement for all loan applications, our lending specialists can make this process EASY for you.

To achieve the best outcome, use an expert, not a local.

HOW DOES APPLYING FOR A LOAN WORK?

Our mortgage brokers make it EASY for you, we only need you to fill out the application and supply the required documentation. We then complete a preliminary assessment and provide the best options for you to select from.

As soon as we know your preferred option and lender, we lodge the loan online directly into their system for a quick approval.

HOW LONG DOES IT TAKE TO APPLY FOR A HOME LOAN?

There are many variables to consider when applying for a loan, factors include the complexity of the loan structure, the prospective lenders’ turnaround times, whether you’re seeking a full approval or approval in principle & of course how strong your application is.

Once your home loan expert has analysed your finances, drafted the structure & discussed lenders, then they will be able to discuss the process and develop a timeline for your application, from the initial stages to approval & right through until settlement.

WHY USE A BROKER OVER A BANK?

There are many good reasons to use a broker to act on your behalf, our home loan experts have a deep knowledge on lender policy, products, niche markets & lenders appetite for certain applications. Our brokers can then give you tailored recommendations that are not only comparable rates, fees and repayments, but have also taken into consideration possible problems, red flags or policy exception requirements and many other variables that go into recommending a suitable and competitive home loan product.

By going directly to a bank for finance, you may spend several days going back and forth providing information, or filling out paperwork, only to be told after you’ve lodged an application that the bank can’t approve your loan. Should you apply at more than one bank, they will leave enquiries on your credit file, which will alert other lenders from the beginning. The first question they will ask is ‘why didn’t the applicant proceed with lender X’.

SHOULD MY MORTGAGE LOAN BE FIXED OR VARIABLE?

Whilst this is a straightforward question, it doesn’t have a straightforward answer. Depending on your circumstances there can be reasons to select a fixed rate or variable interest loan. Currently, interest rates are at an all-time low, and there is speculation that another rate reduction could eventuate in the coming months, if that is the case then now may not be the best time to fix your rate. This is why it is vital to consult with a NEXT home loan specialist to assist you in making the best financial decision.

Fixing your rate can provide some comfort, knowing your interest rate & repayment amounts are set, this assists with budgeting in order to service your loan. The risk is that you may be locked into the loan for a fixed term, and as most lenders have restrictions on fixed loans they may charge you exorbitant fees for breaking the fixed term even in the case of refinancing, selling or increasing loan amount.

A variable rate loan gives you much more flexibility for refinancing, restructuring or making any changes in the future (fixing rate, equity release, change loan term etc.) with variation/exit fees being much less when comparing to fixed rate loan break costs.

When deciding on either a variable or fixed interest rate your home loan expert will seek to evaluate what financial goals are over the coming years to establish what products may be suitable for you.

HOW MUCH MONEY CAN I SAVE BY CONSOLIDATING MY PERSONAL DEBTS INTO MY MORTGAGE?

Consolidating your personal debts into your home loan can greatly increase your cashflow but can increase your overall repayments over time, this is a result of paying 4% interest over 30 years, rather than 11% interest over 5 years, for example.

To ensure this doesn’t cost you more over time, the correct strategy is to consolidate the shorter term, higher interest rate loans into a low rate home loan product, whilst maintaining your existing repayments. This will ensure that you are paying that 4% rate over 5 years, instead of 30. Your NEXT home loan expert can assess your situation to ensure the best loan structure is put in place to suit your needs.

Ready for your NEXT home?

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Free financial health check!

Everyone needs a health check from time to time and with an ever-changing landscape so does your financial health. Our team at NEXT make this an easy process. We can evaluate your current situation and assess how your financial situation is positioned against up to the minute offerings and rates on an obligation-free basis.