If you’re experiencing mortgage stress, you’re certainly not alone. Around 17% of Australians currently have to spend 30% or more of their income to pay off their mortgage. It’s a less than desirable category to be in, so finding a better home loan rate is crucial to avoiding mortgage stress.
However a recent survey of Australians conducted by Galaxy Research showed that a fifth of respondents don’t know how to get the home loan rate they desire. The generations are divided by their pursuit, or lack thereof, of this improved rate. People in their 20s, 30s and 40s are more likely to hunt around for a bargain every year or two, while only 14% of those over 50 did so and took longer (every three to five years). Men are more likely to be proactive than women, with 73% of men compared to 59% of women shopping around.
Comparing home loan rates might not be the most thrilling task on your to do list, but when every cent counts, it’s worth it. Do your homework to find out what the current rates are in your area, which may be different to what you signed up for.
Having done this research, you’ll be better placed to negotiate with your lender or have a broker do so for you. Some lenders offer reduced rates to new customers—if this is the case with yours, you can ask if they’re able to match it for you because you’re a loyal customer. While it’s not a given that they’ll do this, they won’t want to lose you either, so it’s worth a try.
If you don’t get what you’re after, you may want to switch lenders. Some people get stuck at this stage, considering the amount of work that’s involved, however it’s not as laborious as you may think. Extra paperwork can be annoying, but it’s worth doing if it can save you money in the long-run.
A little bit of work now in reducing your rate will end up saving you money and reduce the chances of you being stuck with mortgage stress. Consulting a mortgage broker will make this process run smoother, whether you decide to stay with your current lender or look elsewhere. Your mortgage broker will be able to offer you advice and discuss your options with you, so you’re better placed to make a decision that will impact your financial future.
