Your home loan , for most people, is the largest financial commitment you will ever make.
Rising or falling interest rates can have a huge impact on how much you pay back each month and how much you pay in interest over the life of the loan, which is really the most important part when considering your home loan choices.
By switching loans you could save yourself thousands of dollars in interest or perhaps you would like to take advantage of features offered by another lender or loan.
Before you decide to refinance your current home loan, work out how much it will cost you to switch to the new home loan.
Depending on your current interest rate and any terms you may have signed for when taking out the loan your current lender might charge you fees to exit your current loan, and a new lender will charge you fees to take out the new loan.
Work out whether reducing your interest rate with a new loan outweighs the costs of switching from your existing one. The lower the exit and start-up fees, the more you stand to gain by switching.
If the fees are high it may not be worth switching or may be better to wait and switch later. Ask yourself: ‘Is the cost of switching worth the potential interest rate saving.
Drop us a line if you would like to know just how much money you could save with a new home loan.
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