Mortgage Repayments

Switching Loans

With the last official cash rate increase by the Reserve Bank of Australia on Melbourne Cup Day, the major Australian banks lifted their interest rate higher than the 25-basis-point cash rate increase. This development has prompted a lot of borrowers to seek for other lenders especially the credit unions and trade societies.

Non-banking lenders have reported a significant increase in the inquiries that they receive about the mortgage deals. However, loan exit fees have discouraged many to switch loans. Yet, the Australian government is introducing policies to improve the competition against the four big banks in terms of lending.

Before you decide to switch loans, here are some aspects that you must consider. First, you must research for the best deals possible and check the ones that have the best coverage and features. Then, you must factor in the exit and entry fees when you switch loans and find out if it will help you save in the long run.

Then, you must decide if the switching costs are beneficial in saving more money in the future. Of course, these are easier said than done. Thus, you can seek the assistance of a mortgage broker in all of these needs. Who knows, maybe your broker can strike a better deal for you other than the deals that you have researched.