Is it time to review your mortgage?

For many people the mortgage is someone something they set and forget and the only time they really focus on it is when the refix is coming around and they're looking at the new rates. And this is how the banks like it, if they can get you focusing purely to the actual interest rate rather than the overall cost of the loan they get to take money off you for much longer. If you have a 30 year mortgage on the current average rates you will probably pay close to what you paid for the house in interest.

If you had a mortgage for a while and you've heard yourself thinking that you couldn't rent for what you're paying in mortgage payments now that means you probably haven't raised repayments at all in the last few years but you properly had pay rises. This is very common and many people put all their pay rises into their pocket, and ignore paying the mortgage faster which means the banks get to make a lot more money off you.

So if you have not really looked at your mortgage for quite a while and are wondering if you can pay it off faster or if its structured properly or if there is a way to knock a few years of the term then it's worth doing a full review of it. A good adviser (like the DUX team) will have a look at your loan and give you advice on how to structure properly to avoid interest rate fluctuations, what options you have for paying down faster and if you have a specific timeframe you want to have it paid off by say 12 years or before you’re 50 then they can give you those calculations as well.

It's rare that you should need to change banks but for many mortgage brokers this is what they will try and do because is how they get paid, so you may be better off paying a fee to the adviser for good advice. But you might be with one of the gimmick providers who have a funky system that promises to pay your loan faster but actually doesn't do anything (just like the banks), in which case it's definitely worth getting away from them because your options are limited while you're there.

The key focus to a mortgage is actually getting rid of it, not having it, so rather than worry about what the rates are look to how you can get rid of it faster and get advice on that.

Alan Borthwick