Enlighten Financial Solutions - Mortgage Brokers Australia Finance options

Coming out of a Low, Fixed Rate Home Loan

We’re sure you are aware, interest rates have risen. They are actually returning to normal levels after record low rates for the past few of years but that still doesn’t make people feel comfortable if they know their low fixed rate home loan is due to expire soon.

For all of our exisiting clients with fixed rates expiring soon, we have already finished, are in the middle of or are starting the analysis of their options. Everyone is tracked and taken care of with your systems. Always!
If you aren’t a client of ours yet, then now may be the perfect time to reach out. We start talking to people 6-8 weeks BEFORE their fixed rate expiry date. We would rather be over prepared than under prepared.
Here are some practical suggestions we go over with everyone:

1. Switch to a better loan. The home loan market is intensely competitive, which is why lenders often charge new borrowers lower interest rates than loyal customers. So you could make big savings by refinancing to a lender offering a comparable loan at a lower rate. We are getting some amazing results for existing clients who are coming out of fixed rate periods. Our new clients are surprised that there still are some quite competitive low variable home loans out there. Some with big cash back offers. Home loan reviews have never been so important than they are now.
2. Try not to stress, be realistic. Your lender wouldn’t have approved your mortgage unless it was convinced you could cope with a series of rate rises. Home loans are assessed at a much higher rate and stress tested in this way before approved. So unless your financial position has deteriorated since then, you should be able to cope with higher repayments.
3. Before problems arise, be pro-active. If you think you might struggle to keep making your repayments, it’s important to discuss your options. It’s better to make contact before you miss a repayment, not after. The more communication you have with your lender, and us if you’re a client of ours already, the more flexible the banks are likely to be. Communication is key here!
4. Budget for rate rises & get on the front foot. If you still have some time up your sleeve before your fixed rate expires, assume your mortgage rate will be 5.5%. Calculate what your new monthly repayment would be and start paying it now (you can use our loan repayment calculator on our website – link below). You can put the extra money into an offset account, a redraw facility or a special savings account. This will give you extra buffer room and funds down the track.
5. Improve your savings rate. Look for ways to increase your income and reduce your expenses. See some tips below.
We like to stay solution focused with every scenario we come across. If you think you need to discuss things sooner rather than later, then please do book a time that suits your schedule into our online calendar.

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