When it comes time to re-fix your mortgage you must take the time carefully assess your options so that you may make an informed decision that aligns with your financial goals and circumstances.
Interest Rates
Monitor the prevailing interest rates in the market. Compare the rates being offered by different lenders to ensure you’re getting a competitive deal. Consider whether fixed or floating rates are more suitable for your needs. Fixed rates provide stability and protect you from potential rate hikes, while floating rates offer flexibility but may be subject to fluctuations.
Term Length
Determine the desired length of your mortgage term. Shorter terms often come with lower interest rates, but higher monthly repayments. Longer terms offer more affordable repayments but may result in higher overall interest costs. Assess your financial capacity and long-term plans to select a term that suits your situation.
Financial Goals
Consider your financial goals and how your mortgage fits into them. Are you looking to pay off your mortgage quickly, or do you prefer a more balanced approach? If you’re aiming for early repayment, you might consider a shorter fixed term to take advantage of lower interest rates.
Financial Stability
Evaluate your financial stability and ability to handle potential changes in interest rates. If you anticipate a change in income or financial circumstances, it might be wise to choose a fixed rate that provides certainty and protects you from rate increases.
Penalties and Fees
Understand the penalties and fees associated with re-fixing your mortgage. Check if there are any break fees for ending your existing fixed term early. Consider these costs in conjunction with the potential benefits of refinancing to determine whether it’s financially advantageous to re-fix your mortgage.
Additional Features
Explore the additional features offered by different mortgage products. Some loans may include features like offset accounts, redraw facilities, or the ability to make extra repayments without penalties. These features can provide greater flexibility and potential interest savings.
Seek Professional Advice
Consider seeking advice from mortgage brokers or financial advisors who can provide personalised guidance based on your unique circumstances. They can help you navigate the mortgage market, assess your options and make informed decisions.
Future Plans
Evaluate your future plans, such as potential property upgrades or relocation. If you anticipate major changes in the near future, it may impact your decision on re-fixing your mortgage. Flexibility might be a higher priority if you plan to sell or refinance in the coming years.
By carefully considering these factors, you can make an informed decision when re-fixing your mortgage. Remember to review your options regularly, as the mortgage market and your personal circumstances may change over time.