This blog has been written in partnership with Uno Home Loans
After the recent success of our 10 Day Savings Challenge, I noted that a lot of people identified home loans as one of their biggest weekly costs!
Home loans can make up a huge portion of your weekly/fortnightly/monthly costs and there is very well a chance you are paying more than you should and wasting your money on interest!
Navigating home loans can also be a really daunting experience. And the effort it seems to take to find, compare and change your options can seem too much to even bother!
But, it doesn’t have to be! And realising how much you are wasting and what you could save yourself is likely to be the boot up the bum you need to keep your lender on their toes!
That is why I am thrilled to share with you guys my top tips to save big on your home loan. As well as some handy tools to make the process easier and things to consider when finding, comparing and negotiating the right loan for you.
Keep A Budget
It would be a safe bet to say that your home loan is one of your biggest expenses. Yet, it’s likely the one we pay the least attention too!
A recent study conducted by uno Home Loans on Household Financial Waste revealed that 59% of consumers have never asked their lender or broker for a better rate since they took out their loan.
By keeping a monthly budget, you can see exactly where your money is going. This gives you the chance to calculate against what you earn and see how much of your income goes to living expenses, like your mortgage or rent.
For our FREE Budget Spreadsheet, click here.
Be On The Lowest Interest Rate
Seems like a no brainer right? But as the study noted above shows, people are not actively keeping an eye on their loans. And as interest rates change and lenders change their products, you can very quickly be on a rate or using a product that does not benefit you.
Using a service like uno’s Active Home Loan Management is great because it gives you regular updates on your current rate and compares to others from their panel of lenders in real-time.
Paying even the slightest bit extra to your loan is going to benefit you. Even if you cannot do it constantly, but just when you can, means you reduce your interest, which is calculated daily.
It also creates almost a forced savings account if you have a redraw facility. So you not only save on the interest being calculated daily, the money is there if needed to be redrawn – like an emergency fund.
Consider Outside of Big Banks
In the wake of the Banking Royal Commission, I think it’s become pretty clear that we cannot assume our banks have our best interests at heart – but we already knew that right?
These financial institutions rely on our complacency and it is up to us to remain vigilant in making sure we have the best products for our current situation.
The same goes for brokers, who often work with a small group of lenders that benefit them.
uno has a panel currently of 29 lenders to choose from, and they keep you updated on new and better products for you.
Use A Redraw/Offset Account
Whenever we come into large sums of money, we put these lump sums straight on our home loan. As we have a redraw account it means we can use it basically like a savings account AND save money on our interest.
Every little cent counts as your interest is calculated daily! Like I mentioned before about paying extra 😉
Take Control Of Repayments
Often the default day/date on your repayment will be set by the bank. I cancelled these and set up my own to align with our pay cycle. This makes it a lot easier to make regular repayments and to avoid missing them due to insufficient funds. Especially if you are not watching your balances daily, it can be easily done.
I create my own schedule so that my mortgage payment is the first thing to come out once we are paid and I know how much money I have left in my account for the week.
A little more about Uno
As you can imagine, when uno came to me to try their service and share my experience, I was very keen to see how it could help me and my audience in saving on their home loans.
uno also shared with me their study on Household Financial Waste, which clearly outlined the huge amount of money wasted each year on home loans. And that their mission is to fight that waste.
They do this through their loanScoreTM technology, which is essentially a free check-up for your home loan. It helps you understand how close your loan is to your best available deal. The higher the score, the closer you are to having the best deal for you.
The process is really quick, only a few minutes and then you are armed with exactly the information you need to make an informed choice about changing or negotiating a better home loan.
With this handy little tool in your arsenal, you are definitely a big step closer to reducing your home loan payments, reducing financial waste and potentially saving towards things you actually want!