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If you’re a homeowner, chances are you’ve taken out a fixed-rate home loan at some point. A fixed-rate home loan gives you the security of knowing your interest rate and repayments will remain the same for a set period. However, what happens when that fixed-rate period ends? In this article, we’ll look at some steps you can take to prepare for when your fixed-rate home loan is ending.
Reviewing The House Loan Agreement

Review Your Loan Agreement

When the end of your fixed-rate term is approaching, the first thing you should do is review your loan agreement. This will help you understand what will happen when your fixed-rate period ends. Reviewing your loan agreement helps you prepare for any changes that may occur such as an increase in your repayments or a switch to a variable rate.

Make sure to pay attention to the following:

  • Fixed-rate period: Review the fixed-rate period to know exactly when it ends. Knowing the end date will help you plan accordingly and avoid any surprises.
  • Interest rate: Make sure you understand the interest rate you’re currently paying and what your interest rate will be after the fixed-rate period ends. This will help you budget for any changes in your repayments.
  • Fees & charges: Review any fees and charges associated with your loan agreement such as early repayment fees or break costs. Knowing these fees and charges will help you avoid the unexpected.

Understanding the terms of your current mortgage agreement will help you make a more informed decision about how you should proceed with the options available to you when the time comes.

Refinance Your Mortgage

Refinancing your mortgage involves switching to a new loan product or lender to take advantage of better interest rates or more favourable loan terms. Refinancing your mortgage can help you save money on your repayments and provide you with more flexibility in managing your mortgage. You may want to consider refinancing if you want to:

  • Get a better interest rate
  • Change the length of your mortgage
  • Change the type of your mortgage
  • Access your equity

Renew Your Mortgage

Another option is to renew your mortgage with your current lender. You may be able to negotiate a new fixed-rate period with your current lender or switch to a variable rate. Renewing your mortgage can be a simpler and more straightforward option than refinancing, as it involves staying with your current lender.

Switch To A Variable Rate Mortgage

A variable rate mortgage is a type of loan where the interest rate fluctuates with market conditions. If you’re comfortable with the idea of your mortgage repayments changing with market conditions, you may want to consider switching to a variable rate mortgage. This can provide you with a lower interest rate, which can help you save money on your repayments.

Make A Lump Sum Payment

If you have the means to do so, you could consider making a lump sum payment towards your mortgage. This can help you pay off your mortgage faster and avoid any potential rate increases or changes. However, it’s important to review your loan agreement to understand any potential penalties or fees for making lump sum payments.

Pay Off The Mortgage

Not everyone has the means to do so, but if you do, consider paying off the remainder of your mortgage in full to avoid any potential rate increases or changes. However, it’s important to review your loan agreement to understand any potential penalties or fees for paying off your mortgage early.

Seek Professional Advice

Making the right decision for your financial situation can be difficult, which is why seeking professional advice is recommended. If you’re in need of assistance with your mortgage, Mortgage Innovations is here to help. Our knowledgeable team can provide you with tailored advice and solutions to help you manage your mortgage and prepare for the end of your fixed-rate period. We service a broad area of the Gold Coast including Broadbeach, Burleigh Heads, Burleigh Waters, Carrara, Coolangatta, Currumbin, Elanora, Miami, Palm Beach, Robina, Southport and Varsity Lakes.

Get in touch with us today via our booking form to schedule a consultation and take the first step towards a better mortgage experience.

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