Understanding the Effects of Switching Home Loans on Your Financial Future

Switching home loan providers can offer you many benefits, which you may have already established. While its immediate benefits are evident (it could help you access value-added products, qualify in terms of interest savings/a shortened repayment period or cash from equity available in your property) you may not have thought about how it could impact your financial future — and how you could maximise these benefits. Here's what you should be aware of.

What does it mean to switch your loan?

The home loan you initially agreed to may no longer suit you as time passes. Often, the financial institution in question may not be open to renegotiating your terms — which means you're better off switching home loans.

Long-term benefits of switching your home loan

Here are a few long term benefits you can look forward to if you consider switching your home loan:

It can future proof your home — Your home today may not meet your needs tomorrow — or be suitable for tomorrow's market. One example of this is the increased cost and unreliability of electricity and the growing popularity of building or adapting homes to be more sustainable and environmentally friendly in its building materials, use of natural resources and adaptability to climate change. Switching home loans can help you access equity which you can use to upgrade your home to become more energy efficient. Not only can this lower your future home maintenance and running costs, but it can also increase its resale value.

It gives you options — Sometimes life changes unexpectedly, impacting your finances. For example, your child may decide to pursue higher education, which comes at significant costs, or you may need to pay for ongoing medical care for a family member after an unexpected accident. You may not have enough savings for these unforeseen expenses.

It can improve your credit score — Managing your budget better enables you to keep your credit score in good shape. By switching home loans, you’re likely to qualify for an extended repayment period or lower monthly payments, reducing financial strain. This makes it easier to stay on top of your payments, which in turn positively impacts your credit score by decreasing the likelihood of missed or late payments.

The importance of speaking to a specialist like SA Home Loans

When it comes to home loan switching, the calculations used to determine what offer you qualify for will depend on various factors like your credit record, the value of the property, your current interest rate and the terms and conditions of your existing home loan. Speaking to a trained financial expert ensures your unique needs are taken into consideration, providing you with a personalised, competitive offer. SA Home Loans offers an easy to use Online Switch Calculator that can give you an idea of what you may qualify for. To find out more about what the switching process will involve, contact our team today on 0860 2 4 6 8 10 or request a Call me back for a free assessment.