Not in making my extra repayments or even my minimum repayments, but in checking the competitiveness of my interest rate on my mortgage. I guess I had gotten a bit caught up in juggle of work life commitments, I hadn’t realised how “out of touch” my interest rate had become in relation to the going market rate and I was now wasting money and even worse, time.
This self-financial-discovery was met with guilt after working with Athena Home Loans and seeing their rates as low as 3.09% p.a. where as mine had only just been reduced to 3.76% p.a. from 4.09% p.a. They are also the only providers on the market that guarantee their existing customers will always get the same rate as their new customers on a like-for-like loan. It’s called the Athena Automatic rate-match. And to my bewilderment, new customers were getting “special introductory offers” 0.36% lower than my own rate even though I have been a loyal customer for over 8 years. So in following my own advice, where there are no mistakes, only lessons, I quickly got on with the task of fixing this hole in my leaky mortgage.
To show you how simple it is to finding out if it is worth refinancing your mortgage (i.e. potentially saving serious money and time), I am going to refer to Athena’s process simply because their rates are the most competitive and their process is so easy and pain free. In fact, I am even going to say it is fun and motivating.
First of all, you head to the Athena website, and click “get started” – don’t worry, there is no formal commitment, this is more to show you how much you will save and make you realise how much better off you will be. You enter in the location details of your property, let them know if it is your principal place of residence or investment property, followed by your goals. Yes, your mortgage goals. What a refreshing question to be asked, and one that I have never been asked before.
This is where you would select, “best interest rate” (what I ticked) or “require certain features (if you need your loans set up in a certain manner, Athena can help make that happen), or other needs, such as needing money for renovating, investing, etc or your existing loan expiring or simply not being happy with your current provider.
Once you have done this 30 second job, the next step is to tick your preference, such as if you want a fixed or variable rate, do you want principal and interest or interest only, then how how long do you want to take to pay off your home loan. (HINT: Always make sure your loan period does not restart, i.e. keep your loan term at what is currently is, e.g. if you are 3 years into a 30 year mortgage, keep it at 27 years or even better).
The next step, and the final step before deciding what you want to do, is to enter in your current home loan rate, and be prepared to take a big breath, as you will be shocked as to how much savings you are missing out on. The information shared with you, not only shows how much you should be able to save over the remaining life of your loan, but breaks it down to see the savings per month. Seeing those monthly savings for me was a big wake up call. That is savings that could go towards family living expenses, even help pay for a family holiday or just simply pay off the mortgage a lot faster. Either way, I want those savings in my pocket and not my current loan provider’s.
Once you can see all the information in front of you, you can decide what to do and proceed ahead. With the whole process done online, in a safe and secure manner, and in the comfort of your own home, refinancing has very been more fun, especially when you know the immediate financial benefit from those monthly savings.
So dare yourself to see if your mortgage is as “out of touch” as mine and discover your own monthly savings. Check what your current interest rate is, if and when your loan provider passed on any recent cuts and see if your loyalty is being rewarded with the same love offered to new customers. And remember, those monthly saving are immediate. As soon as your refinance to a better rate, those savings stay in your pocket, for your pleasure and enjoyment.
Canna Campbell is the founder and director of SASS Financial Services, a boutique financial planning firm. She is Channel 9’s exclusive ‘money expert’, founder of financial media platform SugarMamma.TV and best selling author of The $1000 Project and Mindful Money.