Is your mortgage feeling like a burden that is preventing you from achieving your financial goals? 

You aren’t the only one. 

Many Australian households are dealing with the same problems. 

With soaring interest rates, stagnant wages, and rising cost of living, the repayment stress for many people may feel overwhelming. 

However, facing repayment stress does not mean options do not exist. 

Home loans should complement your lifestyle instead of working against it. If the repayments are suddenly overwhelming, it is wise to consider restructuring your loan. 

Now, let’s explore what mid-term adjustments can be made so that the repayment approach of your mortgage functions more effectively while keeping the long-term goals in mind. 

Overhauling Your Loan: Key Considerations 

Many borrowers tend to stick to a specific loan for a long time, even if it no longer suits their needs. It is not uncommon for people to hold onto mortgages for much longer than they are able to pay. Getting a mortgage is a major life decision that, like all financial decisions, should be bespoke. 

Life changes should ideally correspond with shifts in lifestyle, including enhanced earning potential, growing families, and even increased expenses. The absence of positive cash flow can make a prior ‘working’ loan starkly unviable. 

Maintaining regular loan reviews is vital for staying on top of expenses and financial obligations.

Applying the review and refinance strategy leverages the very lowest rate available, while utilizing a mortgage broker might unlock additional refinanced loan options based on the mortgage holder’s profile. 

Hold on to: paying too much interest while the repayment feels like a vice grip cinched far too tight? Why not talk with a mortgage broker? After all, with some searching, the universe of myriad alternative options could be waiting to be explored beyond self-imposed fixed boundaries. 

Refinancing: The First Defense Line  

Refinancing is one of the best solutions for relieving the stress that is piling up upon you. It enables switching to a lower-rated, better, or more flexible loan.  

Even a slight interest rate decrease can translate into saving hundreds every month. However, refinancing is much more than just the interest rates. It is about re-tailoring the loan to fit your situation.  

Some borrowers amalgamate credit cards, personal loans, or car finance into a single loan at a lower rate using refinancing.

Some borrowers may choose to take out a new loan in order to switch to a competing lender that offers better services, including long-term features like offset accounts or redraw facilities.  

  While some borrowers may benefit from refinancing, it is not a one-size-fits-all solution. At the very least, reviewing the loan after two years is advisable.  

Changing the Loan Duration: A Shorter Finish or an Expanded Stride?  

If the primary goal is to reduce the perception of an all-consuming repayment burden, consider easing it by extending the loan term. Known as amortization, this technique stretches the total loan balance over many years, resulting in lower monthly payments. This can provide needed relief during times of budgetary strain on the household.  

A household experiencing slightly higher monthly expenses as a result of a shorter loan term will reap far greater rewards in the long run if its financial health improves. This increase in monthly payment allows for a clinically fast payoff of the house, saving thousands in interest accrued over the years.  

As much as this sounds appealing, the reality is often much different.

Whether you seek immediate comfort or long-term benefits, readjusting the loan period results in relieving financial strain. 

Adjust Pay Periods to Repayment Schedule  

Adjusting payment intervals is often overlooked. With cash inflow, paying either fortnightly or weekly makes managing cash flow much smoother.  

Opting for fortnightly payments instead of monthly will allow you to pay an extra month’s worth each year. This approach provides for 26 fortnights in comparison to 12 months. Over time, this continues to enhance staying well within your budget.  

Mortgage stress can feel overwhelming, so small, adequate changes, no matter how minor, can lead to appreciable savings over time.  

Maximizing Offset Accounts for Mortgages  

Not all modifications to a mortgage demand a refinance. Many homeowners often neglect offset accounts, which results in not fully optimizing already built-in features.  

These accounts are applicable as any funds in savings directly offset mortgage interests if your mortgage includes an offset account feature.

If your loan is $400,000 and you have $20,000 in your offset account, your interest is calculated on $380,000 instead. This is a good scenario where you are paying less interest without changing your repayment amount.   

Another helpful feature is the redraw facility. This feature allows you to access funds above the required loan amount in case of emergencies. This allows for easier access to money without the use of credit cards or personal loans, which come with high interest rates.  

These features offer assistance to any homeowner during their positive or negative moments in life. Understanding these features and utilizing them strategically can be highly beneficial.  

Do a Break-Even Analysis

When you save monthly money, how long will it take to recoup your switching costs? This is referred to as your “break-even point,” and if it’s longer than how long you intend to remain in the property, refinancing may not make sense.

For many Australians, particularly in the face of exiting low fixed rates or higher repayments, refinancing may provide a lifeline to relieve pressure and regain control. For others, remaining in place may be more logical, at least at the moment.

The most important step? Run the numbers. Compare deals. Ask questions. And by all means, talk to a licensed mortgage broker who can help you understand the process from an unbiased standpoint.

How OM Financials Help You Stay Ahead and Lessen Your Burden

OM Financials brings unique guidance to different borrowers across Australia, which assists in alleviating the financial burden from personal attention to their loans. We look at your financial life in its entirety and tweak things that elevate and benefit your overall finances in remarkable ways.

With over 50 lenders partnered with us and understanding the fine print of hundreds of loan products, clients don’t need to feel pressured.

Regardless of the reasons for contacting us, whether it’s refinancing, restructuring, or simply walking you through your available options, our team offers boundless time and bespoke guidance alongside dedicated professionals prepared to guide you in the right direction.

We offer a stress relief loan because home loans should empower you and not come with relentless anxiety. Our approach revolves around education, transparency, practical solutions, and tailored life approaches.

OM Financial Services is the place to go for expert advice on refinancing and custom financial solutions. Our dedication lies in assisting Australian homeowners in making well-informed decisions to reach their financial objectives.

Contact us at 0478 876 967 / Book your consultation to take a step towards securing a brighter financial future.

Turn your mortgage stress into savings. Refinance today and take charge of your financial future with ease!