For many, a mortgage is the most significant financial commitment they will ever make. However, once the papers are signed, it’s easy to set the monthly payments on autopilot and forget about the finer details of the agreement.
Yet, reviewing your mortgage can have profound benefits, from reducing your interest costs to adjusting your terms to better suit your current financial situation.
Interest Rate Changes
Catch Lower Rates – Interest rates fluctuate based on economic conditions. A review can reveal if you’re paying more than necessary. Refinancing to a lower interest rate can reduce your monthly payments and the total amount of interest paid over the life of the loan.
Fixed vs. Variable Rates – Depending on your initial choice and changes in the market, it might be beneficial to switch from a fixed to a variable rate or vice versa. Fixed rates offer predictability, while variable rates can save money when rates decrease.
Equity Growth
Leverage Increased Home Value – As the value of your home increases, reviewing your mortgage can help you understand your new equity position. You can use this equity to secure better loan conditions or fund renovations that increase your property’s value.
Low Equity Margin (LEM) Removal – If your equity has increased to a certain level, you might be eligible to remove LEM, lowering your monthly payments.
Changing Financial Situations
Adapting to Life Changes – Life events such as a change in income, job loss, or growing family needs can necessitate a mortgage review. You may find opportunities to adjust your payment schedule, borrow more, or consolidate debt.
Mortgage Prepayment Opportunities – With an improved financial situation, you might want to pay off your mortgage faster. Reviewing your mortgage can identify mortage prepayment options or penalties, helping you make informed decisions about accelerating your mortgage payments.
Debt Consolidation mortgage
Lower Interest Costs – Mortgage interest rates are often lower than personal loans or credit cards. If you’ve built up equity, you could refinance your mortgage to consolidate high-interest debts into one lower-interest payment, simplifying your finances and saving money.
Long-term Planning
Aligning with Financial Goals – Regular reviews ensure your mortgage aligns with your long-term financial goals, whether paying off your home sooner, investing in property, or saving for retirement.
Reviewing Your Mortgage
Professional Advice
Your mortgage should not be a set-and-forget part of your financial plan. Regular reviews can unlock savings, provide flexibility, and ensure your mortgage strategy aligns with your evolving financial goals and life circumstances.
A mortgage professional can offer insights and options you might not have considered.
