The mortgage crunch in Australia has eased recently as interest rates drop to new lows. This is excellent news for many home owners and investors who had previously been riding a wave of soaring mortgage repayments and increased credit card debt.

As a result of the drop in interest rates many money lenders are promoting a range of financial deals to entice us to take out new loans or re-mortgage with them. Is it time you re-assessed the mortgage contract you have?

Generally speaking it's a very good idea to 'see what's out there' in the market place every five years or so. Obviously, if you have locked in a fxed interest rate it may not be a practical option unless you are prepared to pay exit fees for breaking that contract. These fees often negate any benefit gained from a new deal. In the current low interest rate climate however, it is certainly worth investigating your home loan options if only to ensure you are getting the lowest interest rate for your loan type. And if you think you are being overcharged, don't be afraid to speak to your mortgage provider immediately.

Other valid reasons for refinancing are:

  1. When you want to consolidate your debts by rolling all your debts into your home loan.
  2. When you're paying for features you don't need or no longer use.
  3. You wish to switch lenders.
  4. You wish to borrow further funds against the equity that has built up in your home for renovations or a new car.
  5. You want to switch from a variable rate to a fxed rate
  6. Your financial situation has changed since you took out your original home loan.

Researching home loan choices takes time and financial jargon can sometimes be confusing. Be very careful to read the fine print when taking out a new loan or refinancing. To ensure you are making the right choice, you may want to consider professional advice from a mortgage broker. And finally, always consider the possibility of interest rates rising again in the not too distant future and try to budget accordingly.