Banks are always keen to poach mortgage clients from each other, so they offer discounted rates and cashbacks to entice you to switch. However, switching home loan providers can be an expensive and time-consuming process. Make sure you have a good reason to do it.
The main reasons to consider moving your banking relationship, also known as refinancing, are:
So you've decided that changing banks is the right thing for you to do. The next step is to see if it's cost effective for you to do so.
Bank's offer discounted home loan rates and cashbacks to entice new customers, so you need to make sure that what is being offered by a potential new bank covers the costs involved with changing banks. Costs you may incur during the refinance process include solicitor fees, valuation costs and break fees (if your current loan is on a fixed interest rate).
If you believe it's worth making the change, then go ahead and apply. Check out our related guide below to understand the refinance process more.
A break fee (also known as an 'early repayment fee', a 'discharge fee' or a 'termination fee') applies when you repay part or all of your fixed-rate home loan early. Lenders typically charge a fee if you break your fixed-rate term to switch to a lower interest rate, or you pay off your fixed-rate loan early.
Cash backs are a way for banks to entice you to use them for your home loan. They offer you cash based on the amount of your home loan, that they pay to your account after the loan has been drawn down.
© Copyright 2022 Tella (New Zealand) Limited. All Rights Reserved. Powered by Tella.