Wondering whether refinancing your current loan is worth it?
It almost always is – we’ll get you all the facts so you can make the best decision for your situation. Here’s 2 recent case studies of people we have helped to save a lot of money!
Case study 1.
Kylie and Paul are existing clients. I originally organised their finance for them 5 years ago when they were first home buyers and borrowed 95% of the property value.
I regularly checked their loan balance against their property value to see when they would become eligible for cheaper loans.
A few months back I conducted one of these loan reviews. Their property value had increased sufficiently for them to no longer be charged mortgage insurance if they refinanced. Their old loan had a rate of 5.06% and I was able to get this down to 4.40% (now 4.20% with the latest rate cut) – a saving of 0.66% with a different lender.
On a loan size of $376,000, this is a saving of $3289.03 per year over the life of their loan – which was now 2 years and 9 months shorter than in their previous loan.
Clients were very happy with this saving as they had their first baby in the past 12 months and Kylie is only working part time now so are able to use the lower loan costs towards all their new parenting expenses.
Case study 2
Michael 30 and Jenny 29, no children
Michael is self-employed electrician for the past 3 years, while Jenny has worked in an administrative job for the past 6 years.
Their goal was to pay their home loan off faster.
After seeing me speak at a breakfast meeting about the benefits of having their interest rates regularly reviewed Michael decided to call his own bank. Having been a client of theirs for 7 years he demanded a better interest rate than the 5.79% he was on.
A week later I spoke to him to see if we would like me to get a better deal for them. He told me not to worry as he had already done this – great news!!! I asked what the new rate was and he advised me he had gotten it reduced down to 5.13%, a monthly saving of $261.25 in lower interest.
I asked Michael if he minded if I also tried with his bank to see what better rate they might come back to me with – he said no problem and gave me his details – I made a call to the lender and immediately over the phone got a further reduction to 4.75% – a further saving of $150.41 per month.
Michael was furious at the bank for not offering the same rate to him….. we booked an appointment and after reviewing his loans we looked at the structure and the way they handle their money and ended up changing loans to a rate of 4.28% – they were now an additional $186.04 per month better off. In fact, their total interest saving was now $597.70 per month compared to their original loan.
I also showed Michael and Jenny that if they kept their repayments at the same amount they were originally paying, they would own their home 4 years and 5 months sooner and save a massive $173,969 in interest.