Why should I refinance?
It surprises me when I meet a client for the first time and realise that they haven’t even opened their home loan statement.
What clients can fail to do is check just how much their home loan rate has increased year on year.
It is the old place a “frog in hot water” example.
What is that you ask?
If you place a frog in boiling hot water the frog will simply jump out.
If you place a frog in cold water and slowly turn up the heat, the frog wont notice this increase.
Now I not trying to teach you how to cook a frog. Instead make you understand how the banking system works.
The banks do not jump your rate up by 2 percent. Instead, they slowly increase the rate in the hope that you do not realise.
The banks want new customers all the time. This is why they increase the rates of their current customers while offering new low rates to new customers.
In 2017, the average home loan rate was 4.25%. If we use a $400,000 home loan debt, your principle and interest (P&I) repayment would be $1968.
Today, rates are as low as 2.19%.
The same repayment in today’s market would be $1517. That is a savings of $451 per month. $5412 in 12 months. Fast forward 10 years and that is a savings of $54,120
So my question to you is, what could you do with $54,120?
I know that I would prefer that in my pocket then in theirs, wouldn’t you?
Would you like to understand how much you could save with a refinance?
Use the form below and get in contact with us today.