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How we saved $7,000 on home loan repayments each year

Mozo

Friday 16 October 2015

Paying off your home loan will probably be the biggest financial expense you’ll ever take on. So if you’re signed up to a mortgage with a less than competitive rate you could be paying far more than you ought to. 

To show you how much you could save by making the home loan switch, we hand the podium over to Brisbanite, Jessica Steele who saved a whopping $7,000 a year by refinancing. Here’s her story:

Before Jessica and her husband Brett refinanced, they were with a big bank and being charged 5.05%, which they were unhappy with. Jessica explains, “We went to the bank and asked for a better deal but the best they could offer us was 4.48%. We felt like, once the bank had our business they didn't care.”

The couple decided it was time to look around to see what else was out there and started their search by conducting an online comparison of home loans. Jessica and Brett came across Heritage Bank and liked what the bank had to offer.

“We found Heritage could offer us a much lower rate of 4.14%, which meant we would save around $7,000 in home loan repayments each year.”

Jessica describes Heritage Bank staff as really helpful, making the switching process easy. “Their communication was great and they really made us feel welcome. Everyone at Heritage was much more friendly.”

“We’ve saved heaps by shopping around and will put the money towards our upcoming renovation later in the year,” adds Jessica.

For others out there thinking about refinancing, Jessica advises, “Go for it. It doesn’t cost you anything to shop around and ask questions. Don’t settle for what you’ve got because there’s always a better deal out there.”

Are you thinking about refinancing? Compare today's lowest refinance rates now or read on for Mozo’s 4 top refinancing tips:

1. Budget for any switching costs

Refinancing is a great way of slashing your monthly repayments, but there are a few costs you’ll need to keep in mind, including discharge and exit fees (if you’re signed up with a fixed rate loan) and upfront fees charged by the new lender.

2. Look for flexibility

In addition to a great rate, two popular home loan features your might want to consider are an offset account, which you can use as a place to park your cash and reduce the amount of interest you pay, and an extra repayments facility which allows you to pay off your loan faster. 

3. Compare deals online

Rather than spending hours visiting each lender’s website, use a reputable home loan comparison website like Mozo.com.au to compare home loans side by side and find out which lenders are offering the best home loan rates.

4. Haggle

When you’ve picked a home loan you like, the potential savings don’t stop there. You could slash your rate even further by negotiating with the lender before you sign on the dotted line. 

Fore more handy switching tips read our tell all Refinancing Guide.

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