A Good Time to Review Your Home Loan

Don’t leave your home loan review on the backburner. This post covers everything you need to know about when you should review your home loan.

Do you remember the last time you looked at your home loan? If it’s been a while, you might be paying more than you need to! Surprisingly, only 41% of Australians feel confident about understanding loans well enough, which means many could be missing out on better options that suit their needs.

And, with life constantly throwing us curveballs - new jobs, family obligations, and unexpected expenses - it’s easy for our financial circumstances to shift without us even realising it. That's why regularly reviewing your home loan is so important. Not only can it help you discover potential savings, but it can also ease financial stress and give you peace of mind.

In this blog, we discuss the importance of reviewing your home loan, tips on how to navigate the process, and the benefits you can reap from making informed decisions.

Why Should You Review Your Home Loan?

Regularly reviewing your home loan is crucial for ensuring that it continues to meet your needs and financial goals. Here are some compelling reasons to take a closer look at your current mortgage:

Securing a Rate That’s Right for You: Interest rates can fluctuate significantly over time, and what seemed like a great rate a few years ago might not hold up today. By reviewing your home loan, you may discover opportunities to secure a more competitive rate that could lead to substantial savings on your monthly repayments. A lower interest rate can make a big difference on your overall financial health, allowing you to put more money towards savings or other important expenses.
Access to More Features: As your financial situation evolves, so do your needs. A review allows you to explore new loan products that may offer features better suited to your current circumstances.
Property Valuation: The value of your property can change over time due to market conditions or improvements you’ve made. If your home has appreciated significantly, this could improve your Loan-to-Value Ratio (LVR) and open the door to refinancing options with better rates or terms, which can be beneficial if you’re considering renovations, investing, or upgrading to a new home.
Debt Consolidation: If you have other debts, such as credit cards or personal loans, consolidating them into your home loan might be a wise move. This strategy can simplify your finances and potentially reduce your overall interest payments. A review can help you assess whether debt consolidation is a viable option, allowing you to manage your payments more effectively and relieve some of that financial pressure.

7 Signs It’s Time To Review Your Home Loan

Everyone is different, and so are the circumstances that influence our financial situations. However, there are common signs that indicate it might be time to take a closer look at your home loan. Recognising these signs can help you make informed decisions and potentially save you money. Here are seven key indicators that it's time to review your home loan:

1. It’s Been a While Since Your Last Review

If it’s been over a year since you last reviewed your home loan, it’s a good idea to revisit your options. Just like your financial situation, the housing market is constantly changing, and you might be missing out on better deals or more suitable loan products that align with your current needs.

2. Your Fixed Rate Term Is Ending

As your fixed-rate term approaches its end, it’s essential to evaluate your options. When your loan switches to a variable rate, you might see an increase in your repayments. Reviewing your loan now allows you to explore whether a new fixed-rate deal or another product could save you money and provide stability in your payments.

3. You’ve Accumulated Substantial Equity

If your property has increased in value or you’ve paid down a significant portion of your loan, you may have built up considerable equity. This can give you more options for refinancing, possibly unlocking better interest rates or additional features that can enhance your financial position. A review can help you leverage that equity effectively and help pay for for home renovations, investments, or even consolidate higher-interest debts.

4. Your Loan Features Are No Longer Suitable

As life changes, so do your financial needs. If your current loan features—such as the ability to make extra repayments, access an offset account, or utilise a redraw facility—are no longer beneficial, it may be time to explore other loans that offer features more aligned with your current needs.

5. Interest Rates Are Changing

The housing market and economy can influence interest rates, and even a small change can significantly impact your monthly payments. Keeping an eye on rate movements is vital; if rates are falling, you might find a more favourable deal by switching loans. Regularly reviewing your loan allows you to take advantage of these opportunities before they pass you by.

6. Your Financial Situation Has Changed

Changes in your financial situation—such as starting a new job, experiencing a loss of income, or accumulating new debt—can greatly impact your ability to manage your home loan. A review can help you assess whether your current loan still fits your budget and financial goals or if adjustments are needed.

7. Change in Property Status

If you’re considering selling your home or renting it out, your home loan needs may shift. Different lending products cater to investors or homeowners, and reviewing your loan can help you ensure you have the right structure in place for your new plans. Making these changes proactively can prevent potential complications down the line.

Take Control of Your Home Loan

Regularly reviewing your home loan is an essential step toward ensuring you are making the most of your financial situation. Whether you’ve experienced changes in your property value, financial circumstances, or interest rates, being proactive about your mortgage can lead to significant savings and improved financial security.

As a boutique finance brokerage based on the Sunshine Coast, Mason Finance Group specialise in assisting clients all over Australia, including first home buyers, experienced investors, and business owners. Our team of knowledgeable finance consultants are here to guide you through the review process, helping you unlock better rates and features that suit your unique circumstances.