Wait, is it June already? We know the feeling. One minute you’re making New Year’s resolutions, and the next, you’re staring at the calendar realising the end of the financial year is just a few weeks away.
But before you get distracted by tax returns or EOFY sales, we need to talk about your mortgage. Seriously. With the Reserve Bank (RBA) recently bumping the cash rate up to 4.35%, your home loan is likely costing you a whole lot more than it was a year ago.
The good news? A quick review right now, before June 30, could literally save you thousands of dollars in interest. And the best part is that we do all the annoying legwork for you.
The reality of the two speed property market
The Australian property market is doing something pretty weird right now. We call it a “two speed” market, and where you live (or where you’ve invested) changes the game entirely.
If you’re in Perth, Brisbane, or Adelaide, things are still moving fast. These cities have been incredibly resilient, with prices still climbing thanks to a serious housing shortage. If you own property here, you’ve likely gained a healthy chunk of equity. That equity is like a golden ticket, it can help you negotiate a much better interest rate with your bank or help you refinance to a lender that actually wants your business.
On the flip side, Sydney and Melbourne are starting to soften a bit. High rates are finally catching up, and buyers are becoming more cautious. If you’re in these markets, reviewing your loan is more about protection, making sure you aren’t paying a “loyalty tax” to a bank that hasn’t looked at your file in years.
Stop paying the loyalty tax
Banks are a bit like that gym membership you forgot to cancel, they’re more than happy to keep charging you the old rate while offering shiny new deals to people walking in off the street. This is what we call the “loyalty tax.”
If you’ve been with the same lender for more than a couple of years, there’s a massive chance you’re paying a higher interest rate than a new customer. Even a tiny difference, say 0.25%, might not sound like much, but on a $600,000 mortgage, that’s roughly $1,500 a year staying in your pocket instead of the bank’s.
During an EOFY review, we jump on the phone to your current bank and basically say, “Hey, our client is great, but these other guys are offering a better deal. What can you do?” You’d be surprised how often they suddenly find a “hidden” discount to keep you around.
Making your offset account work harder
If you have an offset account and it’s just sitting there with a bit of cash in it, you might be missing out on a huge interest-saving hack. Every dollar in your offset account is a dollar you aren’t being charged interest on.
But here’s the kicker – not all offset accounts are created equal. Some loans only offer “partial” offset, and some don’t offer them at all. During a June review, we look at your spending and saving habits to see if your loan structure actually fits your life.
Are you using your offset correctly? Are you putting every spare cent in there to drag down that interest bill? If not, we’ll show you how to set it up so your money is working for you 24/7.
The investor special for June 30
If you’re a property investor, June is your time to shine. There are specific strategies that only work if you pull the trigger before the clock strikes midnight on June 30.
One of the big ones is pre-paying interest. Some lenders allow you to pay next year’s interest in advance. Why would you do that? Because it potentially allows you to claim that tax deduction in this financial year. It’s a great way to manage your taxable income, especially if you’ve had a particularly high-earning year.
We also look at whether your investment loan is still “interest-only” or if it’s time to switch. With the current 4.35% cash rate, cash flow is king. We’ll help you crunch the numbers to see which path keeps your portfolio healthy without stressing your bank account.
Why we do the legwork for you
We know what you’re thinking. “this sounds great, but I don’t have the time or the patience to talk to banks.”
That’s exactly why we exist! At More Than Mortgages, we’re all about taking the “ugh” out of finance. We don’t do jargon, we don’t do the hard sell, and we definitely don’t leave you waiting on hold for forty minutes listening to elevator music.
Our team, led by legends like Tristina and Simone, spends all day, every day, talking to lenders. We know who is offering the best deals right now and which banks are being “difficult” about the recent rate hikes. Whether you’re supported by Selena or Tash, our goal is to make sure you feel confident and supported.
We handle the paperwork, we negotiate the rates, and we keep you updated every step of the way. You just get to enjoy the savings.
Give your loan a health check today
Don’t wait until July 1 to realise you could have saved a fortune. The property market is moving, interest rates are higher, and your current loan might be holding you back from your next big move: whether that’s buying an investment property, renovating, or just having more cash for the fun stuff.
If you want to see exactly how much you could be saving, check out our Borrowing Power Calculator. It’s a great place to start.
Ready to stop guessing and start saving? Book an Appointment with us today. Let’s get your mortgage sorted before EOFY rolls around!