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Mortgage wars - what do they mean to you?

Every week we find articles on the media alluding to banks fighting mortgage wars. Interest rates are at an all time low, and banks are advertising some fantastic offers. How does it impact you? Have you recently reviewed your mortgage with an adviser?

You need to make the most of interest rates at present by reviewing your mortgage regularly. You could be missing out if you don't.

As with any good plan, your financial plan needs to be reviewed regularly. For most New Zealanders getting a mortgage and buying a house is the cornerstone of growing their wealth. When you get a mortgage you often get a 30 year term. But most people don't realise that there are things they could be doing to get out of debt faster.

If you don't review your mortgage, chances are things will still tick along. But you could also be maximising your saving and paying off your loan by making some adjustments. Currently, you need to be making sure you are making the most of low interest rates. Definitely something worth looking at.

There are a few things to look at when reviewing your home loan:
  • Are you making the most of current interest rates on offer? Your mortgage adviser can always review your interest rates for you, even if you are on a fixed term loan. Even if you have to pay break fees to re-fix your loan, it could still be worth it in the long run.
  • Do you have the right structure for your current circumstances? The structure of your loan refers to the combination of floating and fixed interest rates you have on your mortgage. For instance, when you took out your loan you might have decided that you wanted it to be 100% fixed as you didn't have any room for variations on your repayments. However things might have changed now and you could benefit from having a floating rate and making extra repayments.
  • Are you satisfied with your current lender? Not all lenders offer the same benefits so it is worth knowing what is out there. You might want to consider things like if you are being charged monthly banking fees or if for example you have the flexibility of making lump sum payments. You also want to ask yourself if you are making use of all the home loan features you are paying for.
  • Are your home loan repayments manageable and allowing you to live the lifestyle you want? Although most people want to pay off their mortgage as soon as possible, you still want to be able to enjoy the lifestyle you want. Are you happy with the current level of repayments? If not, your adviser could help you work out a solution that allows you to keep on track with your goals while enjoying the journey.
  • Could you be doing more to pay off your mortgage faster? Have you received extra money like a bonus at work or an inheritance? You could be using that money to reduce the term of your loan. You could also consider increasing your repayments if you have room for it, making substantial savings.
  • Has your home loan adapted to recent lifestyle changes? You should review your loan with your adviser if you are looking to retire, have changed jobs, had children or have had grown children move out from your house, to make sure your loan and its structure keeps up with your life.
What worked for you when you set up your loan might not be the best solution for you now. As things change, it is important to review your home loan and ensure you are still getting the most out of it.

Do not set and forget – it could cost you. Contact us on 0800 500 510 or mortgages@apexgroup.co.nz to review your current home loan with an adviser.
Image courtesy of fantasista / Freedigitalphotos.net