6 signs you may be ready to switch mortgages
Could you put tens of thousands of dollars back in your pocket?
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Changing mortgages is usually not a priority task. Often people put it off until they finally find a rainy day to get started.
However, switching home loans could save a lot of people a lot of money. I’m talking tens of thousands of dollars for a job that could take minutes. Yes really.
Of course not everyone can benefit from a change of mortgage. There are a few signs that suggest it might be worth looking into sooner rather than later.
1. You’re struggling to cope with refunds
The monthly payments becoming too heavy? You’re not alone.
In a Finder survey of more than 5,000 Australians, almost half (48%) said their rent or mortgage was the most stressful bill and 29% said they struggled to meet repayments.
If you’re in the same boat, you might be able to ease the stress by changing up.
Let’s say you borrow $500,000 over 25 years. A Finder comparison of over 60 home loans shows you could have monthly repayments ranging from $2,082 to $2,453. How much more secure would you feel financially with an extra $371 in your pocket each month?
2. You haven’t looked at your loan in a while
Even if you’re not overburdened by your mortgage, it’s always a good idea to check it regularly to see if you could get a better deal elsewhere.
And I know what you’re thinking. However, switching mortgages doesn’t have to be the arduous process that it is sometimes seen as.
Increasingly, we are seeing digital disruptors speeding up and simplifying the approval process. For example, Nano was originally founded with the goal of solving common problems in the approval process. While big banks can take weeks to approve a loan, the digital alternative can provide a response in minutes.
The faster pace doesn’t seem to be priced either. Data collected by Nano shows that customers who refinanced through the platform saved an average of $63,000*.
3. Looking to sell, upgrade or invest
Whether you’re considering moving, making major changes, or adding a property to your portfolio, chances are you’ll need to review your home loan agreement.
Take the lead and do it before you make firm plans. Depending on how long you have refinanced, the lending landscape may be different.
You never know, maybe you can afford a more luxurious renovation, a new home in a more desirable location, or an investment property with more potential.
4. You want more benefits
There are many standard home loans that will do the trick. But, there are also many home loans with additional features. For some people, this can make it easier to manage your money or even save you money.
A great example is clearing or clearing sub-accounts. The money you keep in your clearing account helps reduce the interest you pay on your home loan.
Say you have a $500,000 home loan and you have about $60,000 in various bank accounts. If you moved the $60,000 into an offset account, you would only be paying interest on a home loan worth $440,000.
This money is not hidden and untouchable however. For example, Nano offers a clearing sub-account accessible through its own debit card as well as Apple Pay or Google Pay.
5. You pay unnecessary fees
Additional fees make it more expensive to transfer and manage your mortgage. Signup fees, monthly fees, account fees, exit fees – they are endless. Where are they?
In recent years, we have seen an increase in the number of brands offering free home loan templates. Be sure to check all fees listed above. You don’t want to find yourself penalized if you find a better deal and want to move further down the line.
6. Your home loan is tedious to manage
Is it a nightmare when you want to make additional repayments? Track your debt? Manage your linked accounts?
If you are having repeated problems, it may be worth looking for a lender with a reputable application and good customer reviews.
For example, Nano customers can get instant access to their clearing sub-account through the app, where they can track their home loan, view transaction history, and make instant transfers.
Make it a priority
Everyone is busy, and since switching mortgages is rarely urgent, it is easily put on the back burner.
But your home loan is a huge investment and when tens of thousands of dollars are on the line, it certainly starts to feel a little more urgent.
If you can identify with one (or more) of the signs above, it might be time to prioritize a change or, at the very least, a comparison.
* This is the average interest savings for all customers in February 2022, and is based on the information customers provided in their application.
*The Nano Card is issued by Hay Limited ABN 34 629 037 403 (Australian Financial Services License 515459). See terms and conditions.