A house is a massive investment, both financially and emotionally. It’s something you live with, passing it on or using it to fund your retirement. If you’re paying more than you should for your home loan, it’s going to hurt more than your monthly paycheck. This is something that will reverberate throughout life.
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Check in with your home loan
You should check on your home loan regularly, to make sure you are getting the best deal. Even a slight difference in what you pay can have a huge difference over the life of a loan. Pay attention to the interest rate, fees, and the term and type of the loan. All of these will impact your monthly payments, and, in turn, how much you pay for your home.
Consider restructuring your loan or switching providers. Doing so can enable you to repay a smaller amount on your home, faster. Which means more money for renovations and other goodies.
There are plenty of tools online that you can use to investigate your options. Bankwest has plenty of calculators to calculate what your minimum loan repayments could be, based on the home loan amount, interest rate, payment frequency, and much more. There are also comparison pages, to check out all the different types of loans available with Bankwest, and how they could impact your bottom line.
Ways you can save
There are many different options when it comes to home loans.
One of the most common types of housing packages are variable rate home loans. The interest rate on these loans fluctuate with the interest rates in the economy. This means you pay less when interest rates are low, although the opposite also applies.
A fixed rate home loan allows you to lock in your interest rate, typically for 1 to 5 years. This could save you when interest rates start to rise, allowing to keep paying the same interest rate as when you took out the loan, and allows you to plan ahead. When you're coming to the end of your fixed rate period it is a good time to look around for new options -- you may get a better deal elsewhere.
If both of these options are appealing, you can get the best of both worlds by splitting your loan -- repaying part of your home loan with a fixed interest rate, and the rest with a variable rate. This is called a split loan, and is offered by providers like Bankwest.
Some banks also have offset accounts -- bank accounts that, when linked to your home loan, will allow you to reduce the interest charged on your loan. If you have $200,000 owing on your home loan, for example, and $20,000 in your offset account with 100% offset, you will only pay interest on $180,000 of your home loan.
Newer home loans may also have different features than what's baked in your old contract. Some of Bankwest's variable home loans, for example, include free online redraw so you can access extra funds online or through your app.
Don't wait to switch
It doesn't take much to find out if you can save by switching home loan providers. Bankwest has a service to text your postcode, or call 13 59 15 to find out if you can save on your home loan by switching to Bankwest. Their home loan experts will complete a home loan review to help you see if you can save.
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The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this publication without first obtaining specific professional advice. To the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit licence 234945, its related bodies corporate, employees and contractors accepts no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this publication.