When your read the news these days you can be forgiven for thinking that the world will come to an end if we don’t put a price cap on the following:
- Electricity prices
- Gas prices
- Fuel prices
- Telecommunications (mobile phone plans really)
There is one expense that (in most households) is more than all the above combined but you don’t do a thing about it. Nothing. But you whine on every time you fill up your car or pay your power or phone bills. That’s because the payment of this expense is discreet. It’s debited from your account. It’s almost a subconscious payment.
It’s the expense associated with owning or renting a home. It’s a mortgage.
Now, if you’re renting, you’re probably thinking “I don’t pay a mortgage”. True, but you do contribute towards someone else’s and your rental is directly linked to how much it’s costing your landlord (as well as demand and supply). This article will still have some knock-on effect to your weekly expenses.
But if you’re a home owner with a mortgage then you should do the following immediately:
- Dig out a recent bank statement or go online to your internet banking statements section.
- Look up what interest rate you’re paying
- Call a broker to see what’s available
- Ask for a cost comparison (that is how much more you will be paying if you stayed with your current bank).
If you haven’t done this since you took out your mortgage a few years ago then you’re donating tens of thousands of dollars to your bank.
That’s right (and at the risk of repeating myself), the cost of doing nothing on your mortgage is usually more than the combined cost of all the other expenses listed at the beginning of this article.
Sure, you can blame the banks and moan about your lot in life. But the reality is that the ball’s in your court.
It’s up to you to get off your backside and call a broker.