7 financial resolutions for your home loan in 2022

Start 2022 on the right foot by setting some
financial resolutions

22 December 2021|4 minute read

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The New Year is the perfect time to come up with some resolutions and financial goals for the year ahead.

For homeowners, 2022 presents a great opportunity to evaluate and improve your home loan and financial situation.

If you’re not sure where to get started, we’ve come up with 7 important and achievable financial resolutions you can set in 2022.

1. Make sure your current home loan is still competitive and suitable

A great place to begin your New Year financial refresh is to review your existing home loan to make sure you’re not paying more than you need to.

Start by comparing your home loan interest rate to the rates your lender is offering new customers.

If your rate is too high, you can try to negotiate it down with your lender, but don’t forget to look at what rates and home loan packages other lenders offer because you may find a better deal.

If you haven’t refinanced in the past couple of years, there’s a strong chance you could get a better deal on your interest rate.

However, interest rates are expected to rise soon, so depending on your situation it might be worth considering fixing your rate and possibly locking in a low rate for the next 1 to 5 years.

If you’re not sure where to get started, you can chat to your local Aussie Broker about your home loan options.

2. Review your home and contents insurance

This isn’t the most glamorous resolution to make in the 2022 New Year, but it’s worth looking into.

Home and contents insurance protects you when the unexpected happens – say, a fire in your home, or your valuables getting burgled.

With an effective home and contents insurance policy, you should be covered to rebuild, repair and replace your insured belongings.

If you haven’t reviewed your insurance policy in a while, it may be time to do so. Check what is and isn’t covered by your policy and make sure any newly acquired valuables are included too.

Plus, it’s a good opportunity to check whether your insurance premium is competitive when compared with other deals on the market.

3. Make extra home loan repayments where possible

While your home loan is the major debt, it’s the interest that makes repayments a drag. Other than getting a lower interest rate, you can help reduce the total amount of interest you’ll pay over the life of your loan by paying off your loan balance faster.

You can do this by making extra repayments towards your mortgage. So, the next time you get a tax refund, a bonus from work, or another unexpected sum of money, consider putting it towards your home loan.

Not only will this put you on track to repaying your loan sooner, but you’ll also save on interest.

If you have a fixed rate mortgage, make sure you check your loan terms and conditions to find out whether you can make extra repayments without penalty.

Some lenders place limits on extra repayments and will charge borrowers break fees for doing so.

If you have a variable interest rate, you can typically make unlimited extra repayments.

Use our extra repayments calculator to see how making additional repayments could help you save on interest and repay your loan sooner.

4. Check that you’re not overpaying on your mortgage

In addition to ensuring that your interest rate is still competitive, it’s also a good idea to check for other indications that you’re overpaying on your home loan.

You might be spending more than you need to if you’re paying for features that you aren’t using. For example, borrowers sometimes end up paying for an offset account that they aren’t using.

This might be because it was a part of their home loan package or an add-on they thought they’d use but haven’t yet.

Some of these features come with monthly or annual costs that can really add up over time.

Either get serious about making the most of your offset account (or other paid feature), or get rid of it.

5. Assess your landlord insurance if you’re an investor

If you own a rental investment property, landlord insurance can protect the property and its contents.

It covers you for certain damage to your property and contents provided for tenant usage.

As with home and contents insurance, it’s important to assess your landlord insurance policy and coverage from time to time.

Compare your premium with other insurers and make sure you have a good understanding of what is and isn’t covered to avoid nasty surprises in the future.

6. Consider making those investment aspirations a reality

Owning an investment property is a goal that many Australians have. An investment property can provide you with passive income, tax benefits and a potentially appreciating asset to sell in the future.

But unlike investing in the stock market, buying a house is a little bit more expensive. Luckily, there’s more than one way to finance property investment.

If you don’t have the savings but have significant equity in any existing properties you own, you may be able to tap into this for a deposit.

Being open minded about your investment property can also produce more opportunities. For example, if you’re willing to invest in another state you could find a more affordable property.

Research rental trends and vacancy rates in your desired location to make sure the property will suit your investment goals.

7. Get your debt in check

Repayments can become overwhelming when you have to worry about credit cards, personal loans and car loans on top of your home loan.

2022 could be the year where you make adjustments to your budget and get serious about paying off your debts.

But if you’re not able to pay them off completely, you can simplify repayments by refinancing for debt consolidation.

By consolidating your debts, you merge any personal loans, car loans and credit card debt under your home loan. So, instead of making multiple debt repayments, you make one per month.

Not only does this help with financial management, but your consolidated debt will be charged interest at the same rate as your home loan.

Typically, home loan interest rates are lower than rates for unsecured debt, so you could save money.

 

If you need help fulfilling some of your 2022 financial resolutions, your local Aussie Broker may be able to help.

Aussie Brokers are experienced with all things home loans and can tell you more about your options. Book in a free appointment today to get started.

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