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Thinking About Switching Mortgage Lenders? Consider This First

We caution you to do your research before switching home loans and provide some alternatives to consider.

Every time there is an interest rate change the first thought to flit through the minds of thousands of mortgage-holders is “should we change lenders to get a better deal?”

For some people that might be a good idea but instead of blindly acting on that urge, always do some homework before you act. Sometimes the devil you know is better than the devil you don’t, and there’s more to a lender than their interest rate. For example…

Fees and penalties

Although exit fees are now history, other fees such as application fees, stamp duty, valuation fees and mortgage insurance may still apply. Sit down and balance up the costs you will incur for making changes to your loan to the potential savings on interest.

Can you get a discount?

Do you actually know for sure what interest rate you are currently paying? Have a look at your loan statements as you might be paying less than you thought as part of a package or borrowed amount. These discounts may not be available from all lenders.

Why not ask?

Lenders don’t like losing customers – it costs more to find new ones – so firstly talk to your lender and ask for a better deal. You might be surprised, they could just say “yes”.

Summary

These are just a few options to help you achieve some savings on your mortgage. Interest rates are an unknown beast so instead of reacting each time there is a change, check your own personal situation then consult with a professional who can give you the right information. It’s too late after you’ve made the leap.

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