Time To Move Your Loan?

After the Australian Reserve Bank's interest rate rise earlier this month most lenders have finalised what they are doing with their interest rates now.

While most lenders have increased their rates by more than the 0.25 per cent from what the Reserve Bank went up, some are now offering new incentives to lure new customers away from their current lenders or they have brought in deals to keep customers from moving.

A few lenders have introduced lower fixed rates options and the reduction or even waiving of early repayment fees. While there are a lot of changes going on in the market, you have to decide if your existing loan is right for you. Moving to a new bank or lender might not always be the best option for a number of reasons.

Even if other lenders variable rate seems better now, the rates are continually changing and the lender with the lower rate now may not have the lower rate after the next interest rate rise.

It is necessary to look at all options and fees you're going to have to pay before changing lenders. This latest interest rate rise has brought the variable rates between the various lenders on a more parallel playing field, closing the gap that was there before the rate change. The reality in this is that the differences between your current lender and the others are not as significant as the media might make it out to be. Another very important factor to consider when refinancing is the value of your property.

Bank valuations on a refinance loan often come in more conservative than a valuation for a normal purchase. If the valuation on your property were to come in lot less than expected this can stop the refinance process completely or may have you incurring much higher and expensive mortgage insurance premiums. This is one important issue that is generally overlooked or not made clear when you look at refinancing.

By speaking to a mortgage broker or someone who has access to the different lenders and knowing what specials and incentives are out there, you should be getting the best and correct advice.