It’s refix time…
We have a mortgage due to refix soon, and interest rates are all over the place, what do we do?
This is a question I’m asked a lot lately. It’s no secret that interest rates have skyrocketed from record low rates over the last year or so and people are seeing some hefty increases to their mortgage repayments as a result. It can be confusing trying to work out what’s the best strategy.
A young family I worked with recently came to me because they were due to refix their mortgage of just over $450,000 and they had done some figures which came back to their mortgage repayments looking like they were going to cost them an extra $217 per week if they refix for the rate they were considering that was on offer from their current bank. That’s a lot of extra money to find each week, especially in the current cost of living crisis we’re all in right now.
This is where it’s important to understand the options you have at this stage, and timing is everything.
These guys had done the right thing, they were still a little bit away from refix time, they had just over 2 months to go on their current structure, wanted to get it sorted and they reached out to me for help.
Because of this, I was able to approach all the major banks on their behalf and present all of their options to them. It got to their time to refix, and they were able to get interest rates offerings not just from their current bank but 3x other major banks which gave them the power to choose the rate and structure that was right for them with some guidance from me.
We ended up moving their lending to another major bank so instead of their increase in repayments being $217 per week, we had an offering that saw the increase reduced to $166 per week even with keeping the lending over the same remaining term. It’s still a lot of money to adjust to, but every little bit counts and $51 less a week is a good saving. More importantly we were able to tailor the structure of their lending to suit their future plans. We were also able to get some good cash contributions from the bank which covered the costs of the lawyers fees to setup the new mortgage.
This whole exercise didn’t cost them anything to do, and they saved money on their repayments and interest to be paid as well as set themselves up better for what they have planned for the next few years. It didn’t take long to get sorted either so it was a major win for them at a time where it felt like things were working against them.
It may not feel like a great time to have to refix but if you have to, it’s a great time to shop around for your lending and consider all your options. The banks are looking to get more business, and there have been some good offerings put forward lately too, so it makes sense to have all your options on the table when the time to refix comes around.
But timing really is everything, if you have a mortgage that’s due to refix sometime in the next 6 months, get in touch and make sure that you can have the ability to make the best decision for your lending. It’s the smart thing to do.