You can still save money when you own a home? Sounds ludicrous but it is possible and highly recommendable to save for those rainy days, or a much needed holiday. The good news is, you can save money by simply fixing your home loan.
There could be some significant savings for home owners just by fixing your home loan. However this depends on a number of factors, so before you fix you should consider the following:
- In general fixed rates are higher than variable rate home loans because you are paying for the security of having a stable rate as well as consistent repayments. However, when the gap between fixed and variable rates closes in, it could mean that you could save more if you were to opt for a fixed rate rather than a variable.
- If interest rates are low and you think that interest rates may rise in the future, by fixing your mortgage you could save more. For example with a $300,000 mortgage at an average three-year fixed rate of 7.64 percent, if the average standard variable rate of 7.06 percent increases by just 1 percent over the next two years, you could potentially save $1200 by locking it in for three-years.
Wondering if you could be making you home loan work better for you or are you interested in looking around for a new fixed home loan lender? Settle in and make RateCity your home for the next little while, as we compare some of Australia’s best home loans and calculate your mortgage repayments to see the money you could save.