Julian Finch: How to tinker with your home loan to reduce your repayments
Announcement posted by Invigorate PR 20 Dec 2024
Leading lending expert, Julian Finch, founder of Finch Financial, is encouraging Australians struggling under the financial weight of their home loan to look at the benefits of tinkering.
"Interest rates are set to remain elevated throughout 2025 with the Reserve Bank's latest report indicating that inflation might not return to target levels until 2026. This prolonged period of high rates is placing significant pressure on Australian households, especially homeowners managing large mortgages," Finch said.
"I strongly encourage households to consider the benefits of loan tinkering and reach out to a lending expert for assistance. Tinkering can save you a lot of money."
Finch is a leading money expert, mortgage broker and founder of Finch Financial, Julian Finch. With decades of experience in mortgage brokerage, Finch offers expert insights and advice to thousands of Aussies seeking to get their loan applications approved. His firm, Finch Financial, achieves some of the highest loan approval rates in the country and is known to secure loan approvals within a matter of minutes.
"There are several practical adjustments you can make to your home loan that can create much- needed breathing room," Finch advised.
Top strategies to tinker with your home loan
Fix part of your loan
"Splitting your loan into fixed and variable portions offers a balanced approach. Fixed rates are still often more attractive than flexible ones and locking in part of your loan provides stability while keeping some flexibility," Finch explained.
"This is a strategy that isn't commonly known as banks want to direct customers into standard products. Splitting a loan into fixed and variable is easy and something finance brokers do every day of the week to help people out."
Fix your entire loan
"If you prefer absolute certainty and peace of mind, locking in your entire loan at a fixed rate is worth considering. This eliminates repayment surprises and allows for more consistent budgeting," Finch said.
Extend the loan term temporarily
"Extending the length of your loan, for example, from 25 years to 30 years, can significantly reduce monthly repayments. Even a short-term extension can ease financial pressure until rates stabilise," Finch suggested.
"This tactic is becoming extremely popular for a lot of households as it helps to reduce the size of repayments quite a bit. Once interest rates start to come back down the loan period can be returned to normal. Property is an asset that continues to rise in value in the majority of cases so paying a little more interest over a short period of time becomes a good solution if it means you can continue to keep the asset.
Negotiate the rate
"Your lender may be willing to offer a more competitive rate to retain your business. It's always worth asking for a better deal, especially if you have a strong repayment history," Finch noted.
Switch to an interest-only loan
"Temporarily switching to an interest-only loan can lower your monthly payments by focusing solely on interest, not the principal. While not a long-term solution, this option can provide temporary relief during financial hardship," Finch advised.
Refinance with a different lender
"While not necessarily tinkering, this approach may be a good solution for anyone not happy with the options that their bank is offering," Finch said.
"If your current lender isn't offering competitive terms, refinancing with another lender may lead to lower rates or more favourable conditions. Speak to a finance broker and they can provide all the options for you including loan products that the banks don't tell you about," Finch says.
Stay proactive and stay ahead
"High-interest rates don't have to mean financial despair. By making informed adjustments, homeowners can weather the storm and maintain control over their finances," Finch said.
"There is still upside risk to interest rates in that they could still go up instead of down making the fixed option something that should definitely be a consideration.
"A short term tinker may slightly increase overall costs of your loan but in comparison to the costs of selling tinkering makes it a far more attractive option.
"The costs of selling are high and include marketing fees $6000 plus, sales agent fees up to 2.5 percent of the property value, legal fees, stamp duty and other costs."
About Finch Financial Services
Based in Hurstville, NSW, Finch Financial Services has been servicing Australian families and businesses with home, personal and commercial loans as well as asset finance services since 2015. Ranked amongst the top five percent of brokerages in Australia according to data from the MFAA, Finch Financial Services is a leading brokerage and family-owned business that specialises in finding its customers loans that are tailored to their needs and goals.