With the financial silly season fast approaching, now is the right time for all mortgage holders to do a spring clean of their financial products and examination of how they are working.

Have Your Interest Rate Reviewed

Getting your Mortgage Broker to review your interest rate should be top of your to-do list if saving money on your home loan and clearing debt is a priority. We recommend that you check in with your Broker on an annual basis to ensure you still have a market leading rate.

The first port of call will be approaching your current Lender to request additional pricing discounts to see what they will offer you as a loyal customer. In most instances, a Lender will present some form of interest rate discount depending on your personal circumstance and after you are armed with this knowledge you can decide if it’s comparable to what else is available in the market. If you feel your Lender is not offering the love you deserve, then your Mortgage Broker can show you more favourable options that may be available elsewhere.

Have Your Lending Structure Reviewed

There may be scope to operate your loan more efficiently by reviewing the structure and products themselves. For instance, in recent times we have seen more attractive fixed rates being offered by many Lenders. Many mortgage holders have seen the benefit of taking advantage of these fixed products, often by splitting their loan to have a portion variable and a portion fixed to reap the rewards offered by each loan product, or even fixing the entire portfolio if that’s the preference. Your Blackburne Mortgage Broker will be able to assist you in identifying if there is a better way to manage your loans and if a simple change in product or package may be an efficient tweak to your portfolio.

Use Your Offset Account Effectively

Whether your Lender has the option of multiple offset accounts or just one, you’re selling you and your finances short if you do not use it effectively. Whether you hold a large sum of money in your offset or a more modest amount, as interest is calculated daily the key is to have as much as possible in there for as long as you can. If you are not already doing so, make sure you use your credit card to pay for your day-to-day expenses, clearing it at the end of the month before the interest charge kicks in. This will ensure your salary is sitting in the account for as long as possible and every dollar you make works harder to pay down your debt for you.

Consolidate High Interest Debt into Your Home Loan

If you have any unsecured debt, the chances are you’re paying high interest rates for the privilege, which in turn may be holding you back from reaching your financial goals. Assuming your equity position allows, a viable solution could be consolidating credit cards or personal loans into your home loan. Although it may sound like a false economy, sometimes going backwards is a way to start going forwards. If a new loan is being sought by consolidating some debt, there is also a good chance a more competitive rate may be snagged in the process.

Consider Paying Principal on Your Investment Lending

The recent investment lending crackdown has resulted in investor and interest only loans being priced at higher rates. It’s now common for investors to consider paying principal on their investment loans to avail themselves of cheaper rates and to begin to chip away at their debt in a cost-effective manner.

Those mortgage holders who potentially stand to benefit from paying principal on their investment debt include those with low or no owner-occupied debt, those with high disposable income or those simply keen to reduce debt and create wealth. Your Blackburne Mortgage Broker along with guidance from your Accountant or Financial Planner will be able to help you choose the right strategy to align with your goals if paying down investor debt is a consideration.