When Should You Review Your Home Loan?

A lot of borrowers assume they’ll know when it’s time to review their mortgage.

Maybe the fixed rate is ending. Maybe another lender is advertising a lower rate. Maybe a friend mentions they’ve recently refinanced and saved money.

While those can all be good reasons to look at your options, they’re not the only reasons.

To better understand when borrowers should genuinely consider reviewing their home loan, we asked three Home Loan Experts brokers the same question:

When does it actually make sense to refinance or switch lenders?

While each broker approached the question differently, their answers pointed to a common theme: a home loan should be reviewed whenever it no longer suits your circumstances, goals or needs.

Most Borrowers Focus On Rates. Brokers Focus On Fit.

When people think about refinancing, they often focus on interest rates.

That’s understandable. A lower rate can reduce repayments and lower the overall cost of borrowing.

However, Home Loan Experts mortgage broker Robert Mo says borrowers often view refinancing too narrowly.

“Refinancing is worthwhile anytime there is a benefit to switching banks.”

That benefit might be a lower rate, but it could also be lower fees, access to equity, multiple offset accounts, greater flexibility or a lender that’s easier to work with.

A borrower looking to purchase an investment property will have different needs from someone focused on paying down their home loan as quickly as possible. Likewise, someone managing a growing family budget may place greater value on cash flow flexibility and loan features than on a small difference in interest rates.

That’s why experienced brokers don’t simply compare rates. They first look at what the borrower is trying to achieve and whether their current loan still supports those goals.

Why Circumstances Matter More Than Most Borrowers Realise

Every home loan is approved based on a snapshot of your circumstances at a particular point in time.

Your income, savings, debts, property value and financial goals all influence the loan structure that is recommended.

The challenge is that those circumstances don’t stay the same.

Mortgage broker Rojina Shivabhakti says many borrowers find themselves in a much stronger position several years after taking out their loan. Income may have increased, debts may have been reduced, and property values may have risen substantially.

As equity grows, borrowers may benefit from a lower Loan-to-Value Ratio (LVR), which can improve access to more competitive lending options and loan products that may not have been available when the loan was originally approved.

Service Matters Too

Refinancing conversations are often dominated by numbers. Interest rates, fees and repayments tend to receive most of the attention.

But mortgage broker Nirayu Shakya says service can be just as important.

He says borrowers should consider reviewing their options if they’re unhappy with their lender’s service or find the lender difficult to deal with.

That may include poor communication, slow response times or a lack of support when circumstances change.

Over the life of a loan, borrowers may need assistance with additional lending, debt restructuring, purchasing another property or navigating changes in their financial situation. The quality of that support can have a huge impact on the overall borrowing experience.

So, When Should You Review Your Home Loan?

None of these automatically means you should refinance. They simply suggest that enough may have changed to justify reviewing your loan.

Ready For A Home Loan Review?

If it’s been a while since you’ve reviewed your home loan, now may be a good time to see whether your current lender is still the best fit.

A Home Loan Experts broker can assess your situation, compare lenders and explain the costs and benefits of switching so you can make an informed decision.

Call 1300 889 743 or complete our free online assessment form, and we’ll help you explore your options.