Australians are health-conscious people. According to the National Health Performance Authority, we tend to visit our GPs between 2.6 and 7.5 times a year, depending on where we live — in Sydney alone, the frequency ranges from 4.9 in the North Shore to 7.5 in the city’s south west. These visits aren’t just about curing some obscure malady, but also about checking up on our health and making sure everything’s running smoothly — you want to nip any potential issues in the bud.
But Australians shouldn’t just be thinking of their bodies as temples that need regular upkeep — they should think the same way about their home loans (in fact, for all we know, these mortgages may well be funding the purchase of temples).
Here are a few indicators you should be evaluating to ensure your home loan is still fighting fit.
How does your rate measure?
Generally, when you check your thermometer, the lower the number, the better — within reason. The Victorian government’s Better Health Channel informs us that approximately 37 degrees Celsius is normal body temperature. The higher up you go, the worse the fever is.
Interest rates are similar to this, except you want them to be as low as possible. Take a look around and do a home loan comparison — how does your one compare? It could be, with the Reserve Bank having cut the official cash rate twice in the last four months, there are some much more affordable options out there now.
Have your circumstances changed?
Our health issues can often be the result of some recent lifestyle shifts. Got a bung knee? Perhaps you’ve recently started doing more physical activities. Dealing with a cough? Maybe you’ve recently taken up smoking.
Likewise, a change in your circumstances can make a home loan that once fit like a glove suddenly inadequate. For instance, you might have recently started a new job, or perhaps given up your old one, changing your monthly income. Or maybe you’ve started a family. In 2013, an AMP and University of Canberra report estimated that the average parent spends from $144 (for kids aged 0-4) to $717 (for those 18-24) a week on each child. That’s at least around $576-$2868 a month not going into your savings account, or your mortgage.
What goodies do you get to take home?
A typical GP visit is often followed by a quick trip to the pharmacy to pick up a cocktail of medicines that you’ll have to carefully take later on. It might even involve being given special tools that you’ll have to use to get better.
Don’t put up with a home loan that withholds the necessary features you need to pay down your debt and build equity. Other products might offer mortgage offset accounts, which help you pay less interest, allow a redraw facility or even let you make additional payments on your home loan without being charged a fee. Your home loan should too.
Are you paying for unnecessary charges and fees?
One of the signs that our bodies might not be in the best of shape is if we suddenly find it harder to do certain things we’ve never had a problem with before. Your friends can wolf down their curries, but you end up with a stomach ache, to the point of vomiting. Why are you paying this price?
It turns out, you should be asking the same question about your home loan. Unreasonable fees and charges shouldn’t be slowing you down, preventing you from paying off your mortgage quicker. These can include everything from charges on paying interest in advance, to redraw and service fees. The latter may be small — only around $10 a month — but put it in your home loan calculator, and over the course of 20 years, that can add up to thousands.