After eleven interest rate rises, the topic of conversation here at Loan Market Lower North Shore is about managing cash flow through these times. Although refinancing seems to be the common solution you don’t necessarily need to. What you need to do is have a conversation with your mortgage broker about your specific needs and make sure that you are getting the best out of your current lender.
In fact, over the last three months, banks have become more aware of the cost of acquisition and are now working harder to retain existing customers. This presents a great opportunity for clients looking to improve cash flow – your bank is more likely to offer you a solution to keep you as a customer.
Here are a few ways to improve and manage cash flow:
It’s always worth asking your existing lender if they can reduce your rate. The outcome of a rate review will depend on various factors, including your financial position, what rate you’re currently on, and the lender’s policies however this is a great option, with minimal effort on your part and almost instant results.
You may be able to extend the loan term and by doing so, lower your monthly repayments, which can improve your cash flow. Keep in mind that extending the loan term will increase the total interest paid over the life of the loan so it’s worth considering the long-term financial impact.
Changing to interest only repayments may provide temporary relief and increase cash flow by reducing your monthly payments. However, it typically extends the overall repayment period and increases the total interest paid over the life of the loan. You will need to consider your financial goals to ensure this is the best option.
A principal reduction is a decrease in the amount owed on a loan. By reducing the principal, the interest you pay will also reduce leaving you with smaller repayments and more cash. Obtaining a principal reduction depends on your lender’s policies, willingness to negotiate and your savings.
Refinancing can be a beneficial option to consider if you want to obtain a better interest rate, take advantage of cashback offers or adjust other loan terms to better align with your financial goals.
Here at Loan Market Lower North Shore, we’re here to help clients navigate the complex world of mortgages and find the best solution for your unique needs. We help you understand the risks and benefits of different mortgage products and ensure that you fully understand all the options available to achieve your financial goals. We are committed to doing what’s in the best interest of our client.
In the current market, with compounding interest rate rises, increased cost of living and the need to improve cash flow, now is the time to give us a call!
Matt Clayton
Mortgage Advisor
Loan Market Lower North Shore
0414 877 333
Book an appointment
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