Mortgage Holders Urged to Reassess Terms as Life and Market Conditions Change
Mortgages are typically taken at a specific point in a family's life, based on income, family size, expenses, and financial plans at that time. However, mortgages often last 20 years or more, during which life circumstances and market conditions can change significantly. Income may fluctuate, family size can grow, other debts may be added or paid off, and property values and interest rates evolve. Therefore, even those comfortably paying their mortgage monthly are encouraged to periodically review their mortgage terms to ensure they still fit their current situation.
Mashi Mortgages, a financial advisory service, reports that in the past six months they have helped families save an average of about 100,000 shekels in mortgage debt or significantly reduce their monthly payments. They emphasize that the goal is to check suitability, not necessarily to change the mortgage. A professional review considers existing debt balance, remaining years, mortgage tracks, refinancing costs, and prepayment fees, alongside the family’s current income, other obligations, cash flow stability, and future plans.
Lowering monthly payments by extending the loan term can ease cash flow but may increase total repayment costs. Thus, a lower monthly payment does not always mean a cheaper mortgage. Families may prioritize stability or reduced exposure to interest rate changes over minimizing total cost. Relevant times to reassess include after several years of payments, income or expense changes, new debts, partial repayments, planning major renovations, or considering buying another property.
For families who have nearly or fully paid off their mortgage, options exist to obtain financing against the existing property for renovations, family needs, debt restructuring, helping children buy homes, or purchasing additional properties. However, the decision to borrow should weigh the long-term costs and impact on family budgets, not just the amount available.
Mashi Mortgages reviews mortgage balances, tracks, change costs, monthly payments, disposable income, additional debts, property value, and the purpose of any refinancing to compare alternatives before decisions. They stress that mortgage and property commitments are long-term but decisions can be revisited. Sometimes changing is right, sometimes waiting, and sometimes maintaining the current mortgage is best. They offer free initial assessments to help mortgage holders and property owners explore their options.
