Compare home loans as circumstances change, says expert

Monday 13 September 2010

Article by Mozo

Australian property owners should look to compare home loans and refinance at some point in their lives, an expert has said.

Simon Norris, director of sales and marketing at Club Financial Services, claimed that it is "unheard of these days" for a client to have the same mortgage for 30 years.

Speaking to News Limited, he noted that people will often weigh up home loan options in order to get the best interest rates at a given time.

In addition, he argued that refinancing can be an important means of unlocking equity in a home, either for debt consolidation or future investments.

"Many people with a young family may feel there is very often precious little money for investment, however, these people could consider refinancing their home loan to assist with wealth creation," Mr Norris said.

"Unlocking equity in their home may give them the funds to act now and improve their long-term financial situation."

However, he also warned that homeowners will usually have to pay a break fee to get out of a mortgage contract, which will vary from lender to lender.

Meanwhile, Peter Taylor of the Herald Sun last week observed that the threat of out-of-cycle rate rises by the major banks is much greater now that the federal parliamentary deadlock has been resolved.

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