The Australian property market has an abundance of home loan lenders vying for your business. All of which have varying interest rates, fees, charges and features. While narrowing down the right home loan does take a bit of leg work, theoretically as it’s mostly done online these days, it pays not to settle for your current home loan and instead shop around to make sure you are still getting the best deal.
Should you switch home loans?
While there are benefits for switching home loans, there could be costs involved and some things you need to consider before making the switch. It can be worthwhile if you take the time to do some planning and research.
Approach your current lender
If you have done your research you can go to your home loan lender and ask them to come to the table with a more competitive interest rate. If they don’t want to lose your business they will try to at least match it with what you have found.
It’s never been easier to compare a large range of home loans and all from the comfort of your lounge room. Kick up your heels and start surfing the net for the best home loan rates by using the RateCity home loan comparison tool. You can even work out what your new repayments may look like with the home loan calculator.
Early exit fees
In July 2011 the government enforced a new law that prevents lenders from charging exit fees for new loans. If you took out your loan prior to this date you might still be charged an exit fee.
To work out if you will be charged an exit fee and how much it will cost you to exit, contact your lender. What your lender will charge you in early exit fees will depend on how long you have had your mortgage for, your balance, the type of home loan and your lender. Typically, if you break from your loan within the first few years you will be charged higher fees than what you would be if you had the loan for longer.
Setting up a new loan
Also consider if there are any costs involved for setting up a new home loan. This will vary between financial institutions.
If you are interested in switching home loans, make sure that you watch the market and see what other lenders are offering. Compare home loans online to see how your mortgage compares and use the home loan calculator to calculate your repayments.