The Ultimate Guide to Renewing Your Fixed Rate Mortgage in 2023
Paul Hill Realty Hope Island is dedicated to assisting clients with Property Sales and Property Management across the Gold Coast. As part of our unwavering commitment to your satisfaction, we are delighted to offer you, The Ultimate Guide to Renewing Your Fixed Rate Mortgage in 2023. Let us help you navigate through the process and make the most informed decisions to secure your financial future.
In 2020, the Reserve Bank of Australia (RBA) took action to combat the COVID-19 pandemic by reducing the nationwide cash rate to an unprecedented 0.10%. This move opened up possibilities for countless Australians to lock in an all-time low fixed rate for their mortgages.
This year, approximately 880,000 fixed-rate mortgages are nearing their expiration, and given the current cash rate of 3.60%, a considerable number of mortgage holders will be confronted with an abrupt surge in their minimum monthly repayments as their loans switch to a higher variable rate.
Although numerous Australian homeowners may find this situation challenging, there are proactive measures borrowers can adopt to ready themselves for the loan expiry period. If your fixed rate is nearing its conclusion, what choices do you have?
1. Consider transitioning to a new variable interest rate:
As your fixed-rate mortgage term concludes, your lender will automatically switch you to their standard variable rate, which may not be their most competitive offer. To secure the best deal, reach out to your lender and inquire about any better rates they can offer. If they cannot provide a more favourable rate, take the opportunity to explore other lenders who may offer discounts or incentives, such as cashback offers for refinancing.
If the mortgage shopping process and paperwork seem overwhelming, seeking assistance from Paul Hill Realty Hope Island can be beneficial. They will streamline the process, taking care of most of the paperwork and comparing various loans and lenders on your behalf. This way, you can make an informed decision without the hassle.
2. Get another fixed-term loan:
If having a clear understanding of your monthly payments is important to you, it might be worthwhile to explore another fixed-rate loan. However, not all lenders may offer this option, so you might need to consider switching to a different lender. Keep in mind that interest rates have significantly increased, potentially impacting fixed-rate options this time around.
Should you choose to proceed with another fixed-rate loan, ensure it comes with the features you require, such as the ability to make extra payments without fees, an offset account, and a redraw facility. Also, be mindful of any potential break costs if you plan to sell your property or refinance during the fixed term.
It’s essential to remember that while fixed-rate loans offer protection from rising variable rates, you might end up paying more interest than necessary. Moreover, if the RBA lowers the cash rate at any point, you won’t be able to take advantage of it if you remain on a fixed rate.
3. Follow through:
If your fixed-rate loan is approaching its expiration, it’s wise to act promptly to avoid potential extra expenses in the future. Begin your research about two months before the fixed-rate period ends, providing you with ample time to make well-informed decisions instead of automatically transitioning to a variable rate with your current lender. If your fixed loan matures during the year, seize this chance to assess your alternatives.
Engaging in a conversation with an experienced property manager, like in Paul Hill Realty Hope Island can assist you in determining the appropriateness of refinancing. They stay updated with the ever-changing mortgage landscape and take your individual circumstances into account to identify the most suitable product for your requirements.
Remember experienced property managers can save you time, money, and headaches.
If you are looking for an experienced property manager with your best interests at heart – look no further than Paul Hill Realty Hope Island! You won’t find a team that is more respected, reliable, and trusted in residential property management.
Paul Hill Realty office is located at Hope Island, we manage residential properties anywhere on the Northern end of the Gold Coast. Paul Hill Realty Hope Island is your best choice in property management and Sales.