When was the last time you reviewed your mortgage?

We are guessing it was when your fixed term last expired. That is pretty standard for most Kiwi households.

But, it could be costing you thousands!

The mortgage market is constantly changing. Interest rates move, bank policies evolve, your financial situation changes, and your goals shift over time. A mortgage structure that suited you two years ago may not be right for you anymore.

You will have heard the whispers that interest rates are likely to rise. So, now is one of the most important times to review your home loan.

Let’s look at what’s involved in a mortgage review and why you need one now.

What Does A Mortgage Review Actually Involve?

A mortgage review is much more than simply asking whether you are getting a good interest rate! A good adviser will look at your entire situation and help you assess whether your mortgage is still working for you.

Here’s what we’ll do:

1: Review Your Current Structure

The first thing we will look at is how your mortgage is currently structured. This review will include questions like:

• Are your fixed terms still appropriate for your finances and the current market?
• Would a split mortgage structure work better to spread your risk or to capitalise on good rates?
• Should part of your loan be floating for flexibility?
• Are you making the most of offset or revolving credit facilities?

Lots of Kiwis will set up a mortgage structure when first purchasing their home and never revisit it. However, as life changes, your mortgage should evolve with your needs.

2: Assess Your Financial Position

Next, we’ll look at your current finances. Your income, expenses, savings habits, and financial goals can all change significantly over time.

In a review, we’ll take the time to look at:

• Changes to your household income
• New debts or financial commitments
• Savings and investment goals
• Family changes
• Career changes
• Upcoming major expenses

All of these things can influence the best way to structure your mortgage and how you manage the repayments each month.

3: Examining Your Fixed Terms

One of the most important parts of a mortgage review is looking at all your fixed terms, what rate they are fixed at, and when they are due to expire.

Banks are very good at offering you the opportunity to refix any expiring fixed-term agreements via internet banking apps or email. This can end up being the most expensive route, as they will usually offer their carded rates or rates with a very minor discount.

A mortgage review offers way more flexibility, including:

• Comparing options across multiple lenders
• Considering different fixed-term lengths
• Evaluating whether refinancing might be beneficial
• Understanding what future interest rate movements could mean for you

4: Identifying Opportunities To Save Money

Finally, a Mortgage Adviser can look for ways that you might be able to save money on your repayments, or shorten the total term of your mortgage.

They can do this by:

• Securing lower interest rates if the market allows
• Suggesting a better loan structure
• Exploring incentives like cash back offers
• Improving your repayment strategies to better align with your income
• Reducing the overall fees paid across the term of your mortgage
• Creating more flexibility for future plans

Even small changes in a review can potentially save you thousands of dollars over the life of your mortgage.

Why Mortgage Reviews Are So Important Right Now

Mortgage reviews are always valuable, but they are particularly important right now.

Why’s that?

Well, things are set to change in the mortgage market. Recent commentary from the Reserve Bank suggests that the OCR may be on the rise in the coming months. Inflationary pressure may push the OCR up sooner and by more than what was initially expected.

As we know, higher OCR often means higher interest rates. Thanks to global pressure and fuel prices, inflation is expected to rise to 4.3% in the September quarter. Couple that with rapidly rising wholesale interest rates, and you could be looking at significant increases to mortgage rates as the banks respond to increased funding costs.

We don’t expect that today’s interest rates will remain the same for long. So, if your mortgage’s fixed term is due to expire in the next year, it’s time to review your options and prepare for potential changes.

Don’t Leave Your Mortgage On Autopilot

When was the last time you looked at your mortgage? And we mean really look, not just checking the balance or the interest rate. It is a big mistake to let your mortgage run on autopilot.

Your mortgage is likely to be your biggest financial commitment, so it deserves some strategic planning and your regular attention.

A mortgage review helps to ensure you:

• Have a structure that still suits your lifestyle
• Are prepared for future rate movements
• Aren’t paying more interest than necessary
• Make informed decisions rather than reactive ones

Ready For A Mortgage Review?

Here are some hard truths. The mortgage market is changing. The decisions you make now can have a significant impact on your finances in the coming years. If you don’t do something now, you could find yourself autopiloting into a situation you don’t want to be in.

It’s time for a mortgage review.

At Mortgage Suite, we take the time to understand your goals, review your current lending, and provide personalised advice based on your unique situation.

Whether it’s almost time to refix, you want to refinance, or you simply want confidence that your mortgage is still working for you, then now is the perfect time for a review.

Get in touch with our helpful team today and we’ll make sure your mortgage is set up to support your future.