Is your current home loan still right for you? 5 things worth checking
When you first took out your home loan, you probably spent a fair bit of time comparing options, working through the numbers and choosing something that suited your circumstances.
But when was the last time you checked whether that same loan still works for you?
Your income, expenses, property plans and financial priorities can change. Lenders also change their products and pricing. A home loan that made sense a few years ago isn't necessarily the best fit today.
Reviewing your mortgage doesn't automatically mean refinancing. Sometimes the right outcome is staying where you are. The point is to make an informed decision rather than leaving your loan on autopilot.
Is your current interest rate still competitive?
Start by checking the interest rate you're actually paying, not the rate you remember signing up for. You can usually find it in your banking app, loan statement or online account.
Then consider how it compares with rates available for borrowers with similar circumstances. A fair comparison needs to account for your loan-to-value ratio, repayment type, fixed or variable structure, fees and features. A headline rate on an advertisement may not be available to you or offer the same benefits as your existing loan.
Even a relatively small interest-rate difference can affect repayments over time. Try different scenarios using our home loan repayment calculator. Remember that the calculator provides estimates and doesn't include every fee or personal circumstance.
You can also explore the broader considerations in our guide to whether refinancing your home loan is worth it.
Are you paying for features you use, or missing ones you need?
Interest rate matters, but it isn't the only thing that determines whether a home loan suits you. Your loan's structure and features can make a real difference to how you manage money.
Offset accounts
An offset account may reduce the balance used to calculate interest, depending on the product. Check whether you use it enough to justify any associated fees or rate differences.
Redraw and flexibility
Consider whether you can make extra repayments, access available redraw and manage repayments in a way that suits your cash flow. Conditions and restrictions vary by lender.
Other considerations include fixed versus variable rates, repayment frequency, package fees and whether your loan structure still matches your goals.
For example, someone focused on paying down their family home may want different features from someone planning to purchase an investment property. Our investment loans page explains some of the financing considerations for property investors.
Has your financial situation changed since you took out the loan?
A lot can happen between buying a property and making your next home loan decision. You might have changed jobs, started a business, welcomed a child, paid down other debts or built equity in your property.
Those changes may affect the type of loan you need, how a lender assesses your application and which options are available.
Think about what's different now
- Has your household income increased or decreased?
- Are you planning renovations, a move or another property purchase?
- Have your regular expenses or other financial commitments changed?
- Would you prefer more repayment flexibility or greater certainty?
- Has the equity in your property changed?
If you've moved into contracting or running your own business, lender income-assessment requirements can vary. See our self-employed home loans information for more detail.
The aim isn't to change loans every time life changes. It's to check that your mortgage still supports what you're trying to achieve.
Would changing loans actually leave you better off?
A lower interest rate doesn't always mean refinancing is worthwhile. There may be discharge fees, application or settlement costs, valuation fees and, in some circumstances, lenders mortgage insurance or fixed-rate break costs.
It's also important to look at the remaining loan term. Extending a loan back over a longer period could reduce the required monthly repayment while increasing total interest paid over the life of the loan.
We've broken down common expenses in our guide to the costs of refinancing a home loan.
It's also worth asking your existing lender whether they can offer a more suitable rate or product before deciding to move.
Should you stay, negotiate or explore refinancing?
After checking the numbers and your circumstances, there are usually three broad paths worth considering.
Stay with your current loan
If the pricing, features and structure remain suitable, you may not need to make a change.
Speak to your current lender
You may be able to request a rate review or ask whether another product within the same lender is more appropriate.
Compare other lenders
If your existing loan no longer suits you, a mortgage broker can help compare available options, explain potential costs and assess whether refinancing makes sense for your situation.
Read more about refinancing with The Mortgage People.
You don't need to have decided to refinance before talking to Martin. A conversation can simply help you understand what you have now and whether it's worth looking further.
How often should you review your home loan?
There's no single review schedule that suits everyone. As a practical habit, consider checking your mortgage at least once a year, as well as when your fixed rate is nearing expiry, your circumstances change or you start planning another major financial decision.
Regularly checking doesn't mean regularly switching. It means keeping an eye on one of your biggest financial commitments.
What should you have ready for a home loan review?
You don't need to gather a mountain of paperwork just to start a conversation. It helps to know your approximate loan balance, current interest rate, repayment amount, remaining loan term and what you'd like to achieve. If you decide to proceed with an application, further information and documents will generally be needed.
If you're unsure about your current repayments, our repayment calculator can help you explore some scenarios before you speak with Martin.
Not sure if your current home loan still stacks up?
Martin Robinson from The Mortgage People helps homeowners on the Gold Coast and across Australia understand their lending options. Whether you're thinking about refinancing or simply want to know if your current loan still suits you, you can start with a free initial conversation.
Book a free initial chat →No obligation to proceed. Any lending recommendation depends on your circumstances and lender requirements.
General information only. This article does not consider your personal financial circumstances and is not a guarantee of loan approval, savings or access to a particular rate. Fees, lending criteria and product features vary.