Home Loan Saving Tips for 2021 – How it works for you.

 Following a difficult year, 2021 is all around finding ways to save on your home loan. In this article we’ll step out some saving tips to help existing mortgagors and first home buyers. 

Get A Lower Interest Rate

On average $400,000 home loan of 25-year with a 3% of interest rate, you’d pay almost $170,000 in interest. If your interest rate were 2.5%, you’d spend just under $140,000 in interest for the same loan.

Interest rates are at all-time lowest right now and it will stay on this stage for the next 3 years, according to the RBA. So, make sure you are taking benefit of these low rates. Here’s how you can improve your chances of getting a low interest rate:

Tips for negotiating a lower interest rate:

·       Play the loyalty card: just staying a long-term customer of a lender can sometimes be plenty to guarantee you a better rate.

·       Do your study: show them that you know there are better interest rates being offered by them or another bank.

·       Don’t be afraid to leave: in this competitive market, lenders won’t be too glad to lose customers, so they might give you what you want if it means you’ll keep on with them.

·        Prove yourself: your lender won’t want to lower your rate if you have a record of missing reimbursements and poor paying habits.

If you aren’t up for negotiating with your bank, ask Home Loan Broker can do this on your behalf.

Refinance: Switch to a better Interest rate.

Refinancing is possibly less worrying than you’d think, and there’s a strong possibility that there are savings expecting for you on the other side. If you think about it, home loan refinancing is just switching to a new home loan that better suits your desires.

Why would I refinance my home loan?

·       You know you can find a better offer on interest rate as your home loan is outdated.

·       You are striving to make repayments.

·       You want to tap into your equity for an upcoming renovation or investment.

·       You want to switch to a fixed rate to get more permanence in your loan.

·       You want to switch to a flexible rate mortgage to get more flexibility in your home loan.

·       You’d like to verify your credit card, personal loan and/or car loan under your home loan to save on interest.

Clean up your credit file.

To increase your options of getting a good home loan and low interest rate, you’ll have to make sure your credit score is strong. Lenders assess your credit history closely when looking at home loan and refinancing applications to determine your risk as a debtor.

First Home Buyer Schemes

If you’re gearing up to buy your first home in 2021, you may be eligible for number of government-run schemes aimed at helping first home buyers. These schemes can save you money and help get you quicker to buying your dream home. However, most only apply to borrowers purchasing a property that they intend to live in (i.e., owner-occupied).

The First Homebuyer Grant is a one-off grant offered by the government to eligible first home buyers. The details of it vary between states, so it’s best to check how it will apply to you. Typically, about $10,000 is granted to first time buyers purchasing or building a new home.

First Home Loan Deposit Scheme (FHLDS)

Got a home loan question? Just ask our Home Loan Mortgage broker in Melbourne!