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What to do when your low fixed rate home loan is maturing

As a home loan borrower, you may have taken advantage of cheap fixed home loan rates in Australia. However, when your fixed term ends, your loan will automatically switch to a variable rate. This change can impact your monthly payment, and it’s important to understand what to expect.

Fixed home loans in Australia are usually offered for a period of 1-5 years. During this time, your interest rate is fixed, meaning your monthly payment remains the same. This can be beneficial if you want to budget your expenses and protect yourself against interest rate hikes.

However, once your fixed term ends, your loan will automatically switch to a variable rate. This means your interest rate and monthly payment can change depending on market conditions.

The change in monthly payment can be significant, especially if you initially took out a fixed-rate loan with a low-interest rate. For example, if you have a $500,000 home loan with a fixed rate of 2% for 2 years, your monthly payment would be $2,148. Once the fixed term ends, your loan might switch to a variable rate of 6%, increasing your monthly payment to $2,998. This is an increase of $850 per month, or $10,200 per year.

To prepare for the change in monthly payment, it’s important to understand your options. Here are some steps you can take:

  1. Review your loan terms: Before your fixed term ends, review your loan terms to understand when the change will occur and what your new interest rate and monthly payment will be.
  2. Budget for the change: Once you know the new interest rate and monthly payment, adjust your budget to accommodate the increase. You may need to cut back on other expenses or find ways to increase your income to cover the additional cost.
  3. Consider refinancing: If the increase in monthly payment is significant, you may want to consider refinancing your home loan. Refinancing can help you secure a better interest rate and lower your monthly payment.
  4. Talk to your mortgage broker: If you’re struggling to make the new payment or are concerned about the impact of interest rate rises on your loan, talk to your mortgage broker. They can help you understand your options and work with you to find a solution that meets your needs.

A mortgage broker can also help you shop around for a better deal on your home loan. They have access to a wide range of lenders and can help you find a loan that suits your needs and budget. By working with a mortgage broker, you can be confident that you’re getting the best deal possible on your home loan.

In conclusion, the change in monthly payment when your fixed home loan matures in Australia can be significant, especially if your interest rate increases from 2% to 6%. It’s important to understand your options and plan accordingly to avoid financial stress. By reviewing your loan terms, budgeting for the change, considering refinancing, and talking to your mortgage broker, you can make the transition to a variable rate as smooth as possible.

Doug Daniell

CEO Origin Finance

Mortgage Rate Increase – Need a Break ? Contact your Broker Now!

Rates Concerning you? Call your broker to get a Rate Reduction

If you’re a homeowner with a mortgage, you know how important it is to stay on top of your payments and make sure you’re getting the best deal possible. Interest rates can play a significant role in the cost of your mortgage, and a high interest rate can end up costing you thousands of dollars over the life of your loan.

Fortunately, there’s a way to reduce the interest rate on your home loan and potentially save yourself thousands of dollars in the process. By calling your mortgage broker, you can take advantage of their expertise and access to a wide range of lenders to find a better rate that suits your needs.

Why Call Your Mortgage Broker?

Mortgage brokers are licensed professionals who specialize in helping people find the best mortgage rates and loan terms for their specific needs. They work with a variety of lenders and financial institutions to find the best deals for their clients and can help you save money on your mortgage in a number of ways.

Here are a few reasons why you should call your mortgage broker to help reduce the interest rate on your home loan:

  1. They can negotiate on your behalf: Mortgage brokers have established relationships with lenders and can negotiate on your behalf to secure a lower interest rate. They know the ins and outs of the industry and can help you navigate the complex mortgage market to find the best deal for your unique situation.
  2. They have access to a wider range of lenders: Mortgage brokers work with a wide range of lenders, including banks, credit unions, and other financial institutions. This means they have access to a larger pool of mortgage products and can find you a better rate than you might be able to find on your own.
  3. They can help you refinance: If you’re already locked into a high-interest mortgage, your mortgage broker can help you refinance to a lower rate. This can save you a significant amount of money over the life of your loan and help you pay off your mortgage faster.

How to Get Started

If you’re ready to reduce the interest rate on your home loan, the first step is to call your mortgage broker. They can help you understand your options and guide you through the process of finding a better rate.

Here are a few tips to keep in mind as you get started:

  1. Gather your documentation: Your mortgage broker will need to see your current mortgage statement, credit report, and income documentation to help you find a better rate. Make sure you have all of this information on hand before you call.
  2. Be clear about your goals: Let your mortgage broker know what your goals are for reducing your interest rate. Are you looking to save money on your monthly payments, or do you want to pay off your mortgage faster? Be clear about what you’re looking to achieve so your mortgage broker can help you find the best deal.
  3. Ask questions: Don’t be afraid to ask questions or clarify anything you don’t understand. Your mortgage broker is there to help you, so make sure you’re comfortable with the process and understand your options.

Conclusion

Reducing the interest rate on your home loan can be a great way to save money and pay off your mortgage faster. By calling your mortgage broker, you can take advantage of their expertise and access to a wide range of lenders to find the best deal for your unique situation.

If you’re ready to start saving money on your mortgage, call your mortgage broker today and see how they can help you reduce your interest rate.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to save your money and sanity!

Doug Daniell – CEO – Origin Finance

New Home Loan Borrowers Getting Cheaper Loans than Existing Bank Customers

New V’s Existing Borrower Rates

If you’re considering taking out a home loan, you may be wondering why new borrowers seem to be getting much cheaper loans than existing bank customers. It’s a trend that has become more pronounced in recent years, and it can be frustrating for those who have been loyal to their bank for many years. If you’re an existing borrower, call your broker now!

There are a few reasons why this is happening, and it’s important to understand them if you want to make informed decisions about your home loan.

Firstly, competition in the home loan market has increased dramatically in recent years. There are now many more lenders offering home loans than there were a decade ago, and this has driven down interest rates and fees. New borrowers are often able to take advantage of these lower rates, while existing customers may be locked into higher rates that were set when there was less competition.

Secondly, banks are increasingly using incentives to attract new customers. These incentives can include lower interest rates, fee waivers, cashback offers, and other benefits. While these incentives can be attractive to new borrowers, they may not be available to existing customers.

Thirdly, banks are more likely to offer their best rates to customers who have a strong credit history and income. New borrowers who meet these criteria may be able to secure much lower rates than existing customers who have had a change in their financial circumstances since taking out their loan.

So, what can existing bank customers do to ensure they are not paying more than they need to for their home loan? The first step is to shop around and compare rates from different lenders. Even if you are happy with your current bank, it’s worth seeing if there are better deals available.

Another option is to negotiate with your bank. If you have a good credit history and income, you may be able to negotiate a lower rate or fee waiver. It’s also worth asking your bank if they have any loyalty programs or incentives that you may be eligible for.

In summary, it can be frustrating for existing bank customers to see new borrowers getting much cheaper loans. However, it’s important to understand that this is a result of increased competition in the home loan market, and banks’ efforts to attract new customers. By shopping around and negotiating with your bank, you may be able to secure a better deal on your home loan.

To see how much you can save contact your broker or call 1300 30 67 67 or fill in the enquiry form on this page.

Doug Daniell

CEO – Origin Finance

At Origin Finance, We Put You First

Origin Finance is one of Australia’s most respected mortgage brokers. We provide our clients with access to a large panel of lenders with an extensive range of home loan products. Many of these lenders are well-known banks, many others are household names who only lend through brokers; others still are specialist lenders who can meet diverse financial circumstances. Origin helps you make the right home or investment loan choice. Call us today 1300 30 67 67.

MFAA LogoOrigin Finance is a
Credit Representative (No. 397786) of
BLSSA Pty Ltd ABN 69 117 651 760,
Australian Credit License 391237