There’s someone in your life that you haven’t been paying attention to. At least, not as much as you need to. And you should, because this particular entity is the gatekeeper of one of the most important aspects of your life: your money.
Who are we referring to? Your lender, of course!
Like most Australians, you might’ve signed up to a bank in your early teens, opted for a savings maximiser account along the way, and started your basic financial journey from there. But unless you’re financially savvy and you question the deal you’re getting on a regular basis, you might be getting ripped off, even after all these years.
How do you know if your bank is ripping you off, costing you money that could be boosting your wealth? Here are the red flags to look for:
Account keeping and ATM fees
It’s not uncommon for people to have more than one bank account, sometimes even three or four. And when each of those accounts is hit with fees for things like transactions, overdrafts, EFTPOS and ATM withdrawal fees on top of a monthly bank fee, it all adds up to be quite a bit of money each year.
Sit down with your account statements and take a look at the fees you’re being charged. If you have three savings accounts and you’re paying a $10 per month account keeping fee on each of them, that’s $30 per month, or $360 per year you’re spending – for no good reason!
The same goes for credit cards. Many people have multiple cards, and they’re paying multiple annual card fees, additional cardholder fees and interest. Amalgamate all of your accounts as much as possible, and avoid these useless expenses.
Paying too much mortgage interest
This is the big one. Minimising your mortgage interest rates can be a difficult thing to acheive; banks and lenders are changing their products and offers every day, so the competitive low rate loan you got 12 months ago could be mediocre today.
This is why it’s so important to work with us as we work with our clients and conduct annual health checks on your finances.
The days of customer loyalty to one bank are over. In this day and age, most lenders don’t reward long-term customers with anything special – so it’s worth shopping around for the most financially beneficial deal.
If you are thinking of switching over to another lender, we always crunch the number to show you how much you could potentially save over the course of your loan. For instance: if you have a $500,000 loan at 4.25% with 25 years remaining on the loan term, switching to another loan with an interest rate of 4.00% could save you $20,850 over the life of the loan.
Ultimately, banks and lenders are a necessity. But that doesn’t mean we can’t use them to our advantage. Do your homework today, to save even more of your hard-earned money in the future.