What Happens After Settlement?

Once your loan has settled, you are beginning an exciting new chapter in your financial journey with a new mortgage. To ensure the smooth management of your loan, there are a few key things you need to work through.

One of the most important aspects after settlement is understand how your loan repayments work and becoming familiar with your account structure. If you have an offset account, it is crucial to know how to utilise this account. An offset account can help reduce the interest on your loan, so ensuring you have sufficient funds in your direct debit account to cover repayments is essential.

While some banks allow your broker to assist in navigating through the setup of your account, unfortunately for majority of banks, your broker will not receive full information of your accounts. Thus, once your accounts are set up and structured correctly, you will be able to manage them more effectively.

Managing Your Loan Moving Forward

The next point of your journey will be reviewing your rate. Commonly, this is best undertaken every 6 months; or, if a fixed loan, you will review these 90 days prior to the fixed expiration. You will receive an email from your broker, but it’s easy to let that slip at times. We recommend being pro-active in nature and reaching out to your broker when in doubt. 

To better understand what happens after settlement, consider these scenarios:

Examples

Example 1:

A client who had a fixed-rate loan approached us for a review once their fixed term ended. We found that the new rate they were being moved to did not compete with the current market rates. Thus, we negotiated with the bank and secured a lower interest rate, saving the client a significant amount in repayments.

Example 2:

In another scenario, a client started off with one offset account, but was using a separate bank for salary credits. After conducting a post settlement review, we found an opportunity to save money. By rolling over the client’s salary credits to the offset account and adding an additional account, they could save even more by holding additional funds in a second offset account. This simple adjustment made a significant difference in reducing interest paid on the loan.

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