The last month has been an exciting one for Australia. Sure, there’s been the release of the federal budget, which will have a huge influence on Australians’ financial decisions over the next year and beyond. But that’s not what we’re talking about.
Unless you’ve been holed away in an underground bunker, awaiting the end of the world, you might be aware that the fourth instalment of Australia’s own Mad Max franchise has recently run riot through global cinemas. After a 30-year hiatus, George Miller’s post-apocalyptic classic has returned in a big way, with a new story, look, characters – even a new Max!
You don’t have to completely overhaul your mortgage, but just tweak a few things to make it work better.
It’s what they call a ‘reboot’ in the business and it got us thinking: What could home buyers who are planning on ‘rebooting’, or refinancing their own loan, take away from this. Plenty, as it turns out.
Improve, but keep the essence
The latest Mad Max is earning accolades as one of the best action movies of the last few decades, partly for its incredible stunt-work and its gripping breakneck pace. Yet what really sets the movie apart, especially compared to other reboots, is how it’s held on to the essence of the original series. At its core, this is still a story about survival in a brutal, post-apocalyptic Australia.
This should offer a useful insight into your own home loan reboot: You don’t have to completely overhaul your mortgage, but just tweak a few things to make it work better – change to a fixed rate, for instance, or alter the loan term to better suit your current needs. If the rest of it is working, then why change it?
For instance, it might be tempting to shorten your loan term at the same time that you fix your mortgage rate – after all, with lower repayments, you could definitely afford to now. Such short-term thinking can trap some buyers, however, if they have a change in circumstances down the line that leaves them unable to keep up with repayments – a shift in employment status, for example, or welcoming a new member of the family.
Don’t go overboard
One of the most frequently cited pieces of praise for the latest Mad Max is its eschewing of CGI in favour of an extensive use of physical stunts and sets. While many reboots – and modern action movies in general – believe overloading the screen with computer graphics is the way to make their film stand out, Mad Max showed that dialling it back could make a movie even more striking. With a budget of around $150 million, this must have taken some restraint.
This should be a lesson for anyone considering making a change to their existing unique home loan. You don’t want to go around making lots of complex changes just because you can. Rather, employ some moderation and only alter the home loan as much as is actually necessary.
For instance, refinancing to debt consolidation loan might seem like a nifty thing to do, but if you don’t have the right level of debt, it may not actually ben an advantage for you. Get out the calculator and tally up how much interest you’d be paying with your current debts, and how much you’ll pay if it was all rolled into one under a lower rate, but paid off over the long term.
Additionally, make sure you’re refinancing for the right reasons. Don’t simply do it because of the ‘grass-is-greener’ mentality, and switch up your home loan when it doesn’t make sense – if the term is nearly over, for example, or you plan to move soon. Take a page out of Mad Max’s book and avoid taking on what seems new and shiny just for the sake of it.