Ideally you will speak to your broker a month or two before your fixed term expires, so that your finances are in order & then you can skip this blog post! If not, read on.
Being in contact with your broker or lender is a crucial step in managing your mortgage effectively. When your fixed rate expires, some lenders may offer you their standard variable rate. However by proactively communicating with your lender, you can explore any alternatives available. Alternatives may include basic products with redraw, a package product with an offset feature or fixed loan options.
An excellent illustration of exploring alternatives is when one of our clients made a strategic move by transitioning from a Package product to a basic product, resulting in an impressive half a percentage reduction in their new fixed rate. But that’s not all – we went the extra mile and negotiated additional interest rate savings for them. This success story demonstrates the importance of carefully comparing rates, fees, features & understanding a range of lenders’ pricing policies to ensure that the chosen option aligns perfectly with their unique needs and goals. In this case an offset feature was no longer worth the premium attached to the rate for these clients.
If you realise that your new rate is too high, it’s crucial to take action promptly to reduce it. You can request your lender to re-price your home loan. It is helpful to familiarise yourself with available competitor options before making this request. Evaluating offers from different lenders allows you to make an informed decision without feeling rushed or pressured. It also ensures that you’re not rewarding lenders who might be taking advantage of the situation.
Fortunately in the current market, some lenders are making efforts to keep their customers satisfied by offering competitive variable & fixed rates for those rolling off very low fixed rates. This approach benefits both the lender (through future interest & happy customers) and you as the borrower. As a result, many customers are inclined to continue using their services as long as the product continues to meets their needs.
Over the past year, there have been significant changes in the mortgage market. I am here to assist you with a comprehensive understanding of finance options. Remember, if you need any help or guidance, please don’t hesitate to get in contact with me on 0466 545 225.