6 signs you might be ready to switch home loans

Could you put tens of thousands of dollars back in your pocket?

Switching home loans isn't usually a high-priority task. Often, people put it off again and again, until they finally find a rainy day to get around to it.

However, switching home loans could save lots of people a huge amount of money. I'm talking tens of thousands of dollars for a job that could take a few minutes. Yes, really.

Of course, not everyone can benefit from switching home loans. There are a few signs that suggest it might be worth looking into sooner rather than later.

1. You're struggling to meet repayments

Monthly repayments becoming too much of a burden? You're not alone.

In a Finder survey of over 5,000 Australians, almost half (48%) said their rent or mortgage was the most stressful bill and 29% said they struggle to meet repayments.

If you're in the same boat, you might be able to ease the stress by switching.

Let's say you borrow $500,000 over 25 years. A Finder comparison of over 60 home loans shows you could have monthly repayments of anywhere from $2,082 up to $2,453. How much more financially secure would you feel with an extra $371 in your pocket every month?

2. You haven't looked at your loan in a while

Even if you're not overburdened by your mortgage, it's still good to check in on it regularly to see if you could be getting a better deal elsewhere.

And I know what you're thinking. However, switching home loans doesn't have to be the arduous process that it's sometimes perceived to be.

Increasingly, we're seeing digital disrupters speed up and simplify the approvals process. For example, Nano was initially founded with the aim of addressing common gripes in the approval process. While big banks can take weeks to approve a loan, the digital alternative can turn an answer around in minutes.

The quicker pace doesn't seem to come at a cost either. Data collected by Nano shows that customers who refinanced through the platform saved an average of $63,000*.

3. You're looking to sell, upgrade or invest

Whether planning to move, make major changes or add a property to your portfolio, it's likely you'll have to revisit your home loan arrangement.

Get on the front foot and do this before you make any firm plans though. Depending on how long ago you refinanced, the lending landscape might look different.

You never know, maybe you can afford a more luxe remodel, a new home in a more desirable location or an investment property with more potential.

4. You want more perks

There are plenty of stock standard home loans that'll do the job. But, there are also plenty of home loans packed with extra features. For some people, these can make managing your money much easier or they can even save you some cash.

Offset or offset sub accounts are a great example of this. The money you keep in your offset account helps reduce the interest you pay on your home loan.

So let's say you have a home loan of $500,000 and you have about $60,000 sitting in various bank accounts. If you moved the $60,000 into an offset account, you'd only pay interest on a home loan the value of $440,000.

This money isn't tucked away and untouchable though. For example, Nano offers an offset sub account which can be accessed via its own debit card as well as Apple Pay or Google Pay.

5. You're paying unnecessary fees

Extra fees make switching and servicing your mortgage more expensive. Application fees, monthly fees, account fees, exit fees – they're endless. Or are they?

In recent years, we've seen a growth in the number of brands offering free home loan models. Make sure to check all of the fees listed above. You don't want to find yourself penalised if you find a better deal and want to switch further down the line.

6. Your home loan is annoying to manage

Is it a nightmare when you want to make additional repayments? Track your debt? Manage your linked accounts?

If you're coming up against repeated pain points, it might be worth looking into a lender with a reputable app and good customer reviews.

For example, Nano customers can get instant access to their offset sub account through the app, where they can track their home loan, see transaction history and make instant transfers.

Making it a priority

Everyone is busy and, since there's rarely an urgent need to switch home loans, it's easily put on the backburner.

But your home loan is a huge investment and when tens of thousands of dollars are at stake, it certainly starts to feel a little more urgent.

If you can relate to any (or many) of the signs above, it might be time to prioritise a switch or, at the very least, a comparison.

*This is the average interest savings across all customers as of February 2022, and is based on the information that customers provided in their application.
*The Nano Card is issued by Hay Limited ABN 34 629 037 403 (Australian Financial Services Licence 515459). See terms and conditions.