MoneyExpert Insight: Look Beyond Traditional Banks for More Competitive Rates

Expert Insight: Look Beyond Traditional Banks for More Competitive Rates

Delving into the Benefits of Home Loan Refinancing: Wisdom from Finance Expert Julian Finch

Many individuals perceive home loans as a complex maze, often relegating them to the ‘complicated’ box, rather than investing the effort to decode them. This avoidance might come at a cost, cautions finance whiz and chief broker at Finch Financial Services, Julian Finch.

Finch, whose firm is devoted to aiding Australian households with home and personal loans, suggests that refinancing could be a game-changer.

“Is your home loan serving you, or are you in service to your home loan?” jests Finch.

Julian Finch
Julian Finch

A common misconception among individuals with home loans from major banks is the belief that they are already availing the best possible interest rates, and that eventually, the rates will decrease.

However, Finch emphasizes that this is far from the truth. The reality is that a negotiation and a tailored loan structure can unveil a near one percent rate difference between providers.

On an $800,000 mortgage, a one percent rate difference translates to a potential saving of $8,000 annually on interest payments. Over a period of 25 years, this amounts to a saving of up to $200,000.

Why It’s Time to Reevaluate Your Home Loan

Refinancing may initially appear as a hefty expense, however, with an average cost of about $1,000, the long-term savings overwhelmingly justify the upfront cost. In fact, most of Finch’s clientele find themselves in the profit zone within a few months post-refinancing.

Regardless of market trends, Finch advocates for refinancing, especially if it leads to a more favorable rate.

Numerous individuals are transitioning from fixed-term rates, and this juncture presents an opportune moment to seek better options instead of settling for higher flexible rates.

Refinancing may also align with other financial goals like home renovation, debt consolidation for better financial management, or availing new loan features like an offset account.

A Plethora of Mortgage Products Await

With around 6,000 mortgage products currently available, the market offers a rich array of options. Finch encourages engaging with a mortgage specialist to explore the most suitable rates based on one’s financial standing.

The lending market extends beyond the conventional offerings of mainstream banks. While these banks offer a range of ‘off the shelf’ products, there’s a broader spectrum of loans accessible via finance brokers, often at more appealing interest rates and with a higher degree of customization.

Accelerate Your Loan Repayment and Save More

Life’s circumstances evolve, and so does one’s capacity to expedite loan repayment. Refinancing can be a lever to achieve this, helping you amass more equity swiftly and save on interest over time.

Debt Consolidation: A Strategy for Savings

Consolidating debts can accelerate your journey to becoming debt-free. By amalgamating various loans into one, you might end up paying more monthly, but the reduction in interest rates could propel you towards quicker debt settlement.

Building Your Financial Dream Team

The vast number of loan options and providers in Australia can be daunting. Hence, finding a seasoned team that offers more than generic solutions is crucial. Look beyond the conventional big four, and align with experts who provide flexible, personalized financial strategies, emphasizes Finch.

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