Talking coronavirus and your home loan with mortgage brokers in our Top 3 Local Choice directory

The COVID-19 is proving to be a significant disruption to life as we know it. Social distancing and forced shutdowns are causing hardship for many businesses in Sydney, around the country, and around the globe. Naturally, Sydney business owners and their employees are all worried about what the future holds, especially when it comes to their mortgages.

With so many thousands of Australians now looking at significantly reduced incomes, the future is looking uncertain for many homeowners, but mortgage brokers in our Top 3 Local Choice directory say now is not the time to panic, but to keep a clear head so you can make sensible choices.

Some relief will be available in the form of low-interest rates, with the RBA dropping the rate to historical lows. While low-interest rates will provide some relief, many homeowners will be looking for other strategies to keep their heads above water.

Here’s what the Top 3 Local Choice mortgage brokers recommend:

1. Switch to a lower interest rate loan

It is advisable for borrowers to put pressure on their lender by asking for lower rates, and if they won’t come to the party, then vote with your feet and switch to one that will.

Banks won’t want to lose loyal customers in this economy, so threatening to take your business elsewhere may inspire them into giving you a lower rate.

Even if you keep the repayments at the same level, a lower interest rate could mean you own your home a few years earlier. The results will be even better if you can manage to increase your payments.

2. Consolidate your debts

If you’ve got a few small debts on credit cards and store cards, your interest payments are probably higher than they should be. In these cases, a consolidation loan is recommended.

A consolidation loan can simplify your repayments, reduce your interest bill, and free up some much-needed cash coming into the household.

3. Borrow more money

At first glance, borrowing more money may not make much sense. However, if you increase your mortgage to do those overdue renovations, you won’t be increasing your mortgage by much, but you could potentially add significant value to your home. Plus, you will be doing your part to stimulate a depressed economy.

4. Take advantage of lender’s bonuses

Some lenders are offering up to $4,000 to refinance them, which can be used as a lump-sum payment to pay down the debt and reduce the interest bill. This incentive can make switching from a fixed-rate loan to a variable one an attractive proposition, while also offsetting some of the costs of refinancing.

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