When Should You Get a Home Loan Health Check?

When we think about securing a home loan, it’s not necessarily a "set and forget" decision. Our personal circumstances can change over the years, as will home loan interest rates and, just as importantly, lender offers. 

But what does that mean for homeowners? Essentially, the loan that may have suited us a few years ago might not still be the best option for us today. That’s why it’s essential to review your home loan from time to time, to assess whether you’re still getting the best possible rate, or if it’s time to get your home loan refinanced.

Stay with us as we discuss why (and when) we should consider getting a home loan health check. 

Reviewing Your Current Home Loan: Why It’s Important 

Even when we feel like we’ve locked in a great home loan rate, it’s still worth reviewing it from time to time, carrying out what’s commonly known as a home loan health check.

One of the first, and arguably most important, factors to look at when doing a home loan health check is the interest rate. The reality is that even the smallest difference in our rate can make a massive difference to our repayments over time. This is especially true when we’re dealing with a substantial mortgage balance. 

So, rather than assuming that our existing lender is still offering us the most competitive deal, it's worth comparing our current rate with what else is available in the market. It's also worth checking whether the home loan still offers features that actually suit the way you manage your mortgage today.

An offset account, redraw facility or flexible repayment options can be valuable features, but only if they're relevant to our personal circumstances, and what suits us best in the present moment.

To that end, a home loan health check is about more than just finding the lowest possible rate, but also involves assessing the overall value of our existing loan.

Is Your Home Loan Rate Still Competitive?

In the instance that a home loan health check reveals our current home loan might no longer be the most competitive or best option for us, refinancing could be worth exploring. 

Refinancing essentially involves replacing an existing home loan with a new one, either with your current lender or a different one. There are many potential benefits to doing this: a lower interest rate, for example, or more competitive loan features, or even a structure that better reflects our current financial goals.

Despite this, it’s still wise to err on the side of caution: there can be costs associated with refinancing a home loan, such as application, valuation or discharge fees. It's important, then, to also consider whether these costs are outweighed by the potential savings. 

What Does a Broker Review During a Home Loan Health Check?

When speaking to a mortgage broker about your home loan health check, you’ll want them to look at the bigger picture, rather than focusing solely on the interest rate. This includes looking at your current loan balance, interest rate, repayments, remaining loan term, fees and features. The broker may also look at recent updates to your income, expenses and debts, as well as broader financial circumstances that may have changed since the original loan was approved.

A broker like Orange Home Loans can help compare options, including comparing your existing home loan with other available options on the market, as well as explaining whether changing lenders or restructuring your loan could be worthwhile.

They can also help explain the potential costs involved in refinancing, so you’re not making a decision based purely on an attractive advertised rate.

Ultimately, a home loan health check can be seen as a financial ‘tune-up’. We don't necessarily need to change anything, but taking the time to review our mortgage can give us the confidence that it's still working as hard for us as it should. 

Think of a home loan health check as a simple way to make sure your mortgage still fits your financial and lifestyle needs.

Regularly reviewing your interest rate, loan features, fees, and your personal circumstances can help you spot opportunities you might not otherwise. Sure, refinancing won't be the right choice for everyone, but comparing options can give us greater certainty that we’re getting the most competitive deal. 

With a home loan likely to be one of the biggest financial commitments you’ll make, it’s well worth reviewing it every so often to make sure it’s still the best choice for you.

---

Jenny Kakoudakis is a seasoned interiors blogger that follows and writes about design trends. She launched the award-winning Seasons in Colour in 2015 and the luxury property and interior decor blog www.alltheprettyhomes.com in 2024 to cover all your interior design, travel and lifestyle inspiration needs.