Why reviewing your home loan matters

Your home loan is something that will probably be part of your life for many years.

For a lot of us, it'll be our largest financial commitment. But while it might be tempting to “set and forget” your mortgage, keeping an eye on it and checking in regularly can really pay off.

Here's what you need to think about.

The importance of regular reviews

Your circumstances will change throughout your life, and so too could the right home loan settings.

Reviewing your home loan at regular intervals will help make sure it's still a good fit for your situation and gives you an opportunity to make adjustments.

Why?

When you review your home loan, you'll probably want to think about a few things.

Your interest rates: You'll usually have a chance to reassess your interest rate each time your fixed rate comes up for review, and you can review a floating rate loan at any time. When interest rates are moving, you may wish to do this more regularly.

This is a good opportunity to see what's available, and what fixed term might be appropriate for you.

Deciding how long to fix for often comes down to a combination of the rates available and how much you as the borrower value certainty around repayments. A longer term may provide stability, even if it's at a slightly higher rate. However, if you plan to sell soon or repay your loan earlier in another way, you might value flexibility.

Others prefer shorter terms or even floating to be able to have more flexibility in the future. You'll need to weigh it up based on your individual situation, and your SHARE or Newpark Home Loans adviser can go through the options with you.

Your strategy: When you review your loan, you can consider whether your current strategy is still delivering for you.

Would dividing your loan into smaller parts reduce your interest rate risk, for example? If you have a couple of smaller loans fixed for different terms, this reduces the risk that you'll have your whole loan coming up for refixing at the peak of an interest rate cycle. It might also give you more options to reassess your settings.

Your payments: Your circumstances may well have changed since you took out your home loan. You might be earning more, and be able to pay a little extra off your loan. You might have taken some time off work and need to go back to the minimum required repayments for a while. Regularly reviewing your home loan helps make sure your payments are at a suitable level for you.

Signs it's time for a review

When your fixed term comes up for refixing, it's a great opportunity to review your home loan.

Aside from that, there are a few other things that might indicate it's time for a check-in.

• Your income has changed: If you're earning more, you may be able to look at your repayments to see if you can pay your loan down more quickly, potentially saving interest over the term of your loan. If you're earning less for a period of time, you might like to review your options to get through.
• Your equity has increased: If you've been paying a low equity margin or have not able to access special interest rates because of your equity level, reviewing your loan regularly will help you notice when your equity has increased enough to potentially have that premium removed, or allow you to access the specials.
• You're thinking about moving or buying another house: If you're thinking about taking out more lending to buy another property, or shifting to a new house, it might be a good idea to review how much of your loan you've paid and how much equity you've built up.

We're here to help

We can help you review your home loan at any time, to ensure that your strategy is still a suitable fit for you and that you're making progress towards your goals, whatever they may be.

Our team of expert home loan advisers can answer any questions you have, no matter where you are in your home loan journey.

_{Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.}