Five home loan hacks: turn mortgage pressure into opportunity

This guide will give you five tips to transform a mortgage cliff into a road to financial ease. Whether you're looking to optimise your existing mortgage, unlock hidden savings through equity, or collaborate with expert mortgage brokers, we share actionable insights for buyers, owners and  investors in Perth and beyond.

In this blog we’ll explore:

• Annual mortgage reviews
• Unlocking hidden savings
• How to leverage equity
• Being loyal to yourself not the bank
• Working with an expert to refinance

Let’s dive in.

Tip 1: Do an annual mortgage review to avoid overpaying

Mortgages might last for 30 years but they’re not set and forget. We recommend that you should review your mortgage every year. It’s like a home loan health check. You may have moved jobs, started a family or had a pay rise — as your life and needs change, so should your mortgage. It’s a good idea to make sure your mortgage is the best product for your financial situation.

Plus, taking the initiative to explore alternative options in the market could lead to substantial savings on interest charges. Which can result in a shorter repayment period for your loan. Interest rates are changing all the time and Australia's lenders offer a range of very competitive home loans. If you find a product that’s more suited to your current goals, you could save you hundreds (if not thousands) of dollars in the process. We’d love to help you with an annual home loan health check, email us to get started.

Tip 2: Unlock hidden savings through equity

For homeowners with less than 20% equity, the mortgage insurance double whammy can be a hidden cost. Mortgage lenders often charge insurance premiums and maintain higher interest rates for those with limited equity.

Let’s say you purchased your first home with a 10% deposit and you’ve been working hard to pay off your mortgage. Over time, your equity has risen from the 10% you paid with your deposit to 20%. You could now be eligible for a lower interest rate and you don’t need to pay an insurance premium. However, to get access to these savings, you need to renegotiate your loan.

And most importantly, you need to know about the mortgage insurance double whammy in the first place. Buying your first home? You can roughly calculate Lenders Mortgage Insurance here. But remember, it’s always best to get tailored advice from a broker.

Tip 3: Leverage  negotiation power through equity

Don't assume that banks give the same rate to everyone. RateCity data shows that the average interest rate for a borrower who owns 30% of the property is 72 basis points less than a buyer who has just a 5% deposit. What does this mean? The more equity you have the more interest rate bargaining power. This has to do with your loan-to-value ratio (LVR) — the percentage of property value that belongs to you, rather than your lender. The more equity you have in your home, the better interest rates you might be able to access. Borrowers with high equity (or low LVRs) are less likely to default on their loans, so lenders prefer them. It makes you a safer bet, and less risk for the bank might equal a lower rate for you.

Remember, equity can also grow as property prices do. It’s best to talk to a professional mortgage broker in Perth, to see how much equity you have in your home. It could be your ticket to a lower rate.  

Tip 4: Be loyal to  yourself – not the bank

Often  banks won't reduce rates unless they really fear losing you as a client. So, why would you stay loyal to them? We know that loyalty is commendable and sometimes banks do offer fantastic customer service or perks. But, financial institutions are profit-driven entities and assuming they will consistently offer the most competitive rates may not always hold true. Being loyal to yourself acknowledges that you’re looking for the best offer for yourself or your family. Rather than relying on your favourite bank to come to the party with a great offer.  

Plus, the financial landscape changes all the time. New and more competitive interest rate offers regularly enter the market. It’s important to stay open to exploring alternative options, so that your home loan aligns with both your evolving financial goals and the current market conditions. Your financial health is just like your physical health — you need to nurture and take care of it. Proactively seeking the best financial terms allows you to make informed decisions and puts you in control of your financial journey.

Tip 5: Work with an expert to  refinance

Over 70% of all Australians  seeking to arrange finance for a home mortgage now choose a broker. Refinancing in Perth can be stressful, but it doesn’t need to be. Choosing a mortgage broker for refinancing is like having a financial ally by your side. We bring a wealth of industry know-how and keep a finger on the pulse  of the mortgage market's latest trends, lender policies, and interest rates. We use our expertise to guide borrowers toward loan products tailored to individual financial situations and goals, making the complex process more manageable.

What sets us apart is our network. We’ve established relationships with various lenders, providing access to a broader range of loan options than you might discover on your own. In some cases we can negotiate better terms and conditions so you can save more on your mortgage. Beyond the financial perks, we also simplify the application process, handling paperwork and liaising with lenders, saving you precious time and reducing the stress associated with refinancing.

From cliff to opportunity

Navigating the world of home loan refinancing in Perth might seem like an overwhelming journey. But practical tips and strategies can help to turn financial  pressure into an opportunity for ease. From the simplicity of annual mortgage reviews to leveraging your equity and collaborating with expert mortgage brokers, use our five tips to navigate the refinancing landscape with confidence.