Should I Refinance?

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Refinancing a mortgage can be daunting. Fees, fixed versus variable interest rates and monthly charges all need to be considered.

The right refinanced loan could help you pay off your mortgage faster and for less, clear unhealthy debt or help you upgrade and add value your home, all of which are steps in the right direction.

My lender is charging me a higher loan rate than I see advertised elsewhere. Can I change lenders?

This is exactly the reason why most people change lenders. There may be a penalty clause in your current home loan, meaning you may need to pay a discharge fee, but it could still be in your financial interests to change.

When shopping around it is always important to look for the comparison rate of a product. A comparison rate is essentially the true rate, taking into account the fees and charges you will pay on the loan. So even though you see a lower rate it doesn’t mean the repayments are less.

We are able to take the hassle out of this for you. We have access to over 1,400 mortgage products from more than 30 lenders.

I have just come off a ‘fixed rate’ or a ‘honeymoon’ interest rate to a much higher rate. Can I move lenders or am I locked into my mortgage?

You can walk away from most mortgages, although penalty fees sometimes apply. To review your options, contact us.

If I move my mortgage to a new lender, is there anything stopping that lender from increasing their rates in a few months’ time?

It depends what kind of product you have. If you’re concerned about rising rates, perhaps you should consider a fixed rate home loan, where repayments are fixed for a period from 1 to 5 years.

Why do some lenders charge more than others for lending the same amount of money?

Banks and other lenders pay different amounts for the money they on-lend to you, they have different overhead structures and different profit expectations. All these factors affect how much they charge to lend people money.

 

To find out more on this and other mortgage related issued please give us a call on 1300 252 088.

Lenders Assessment

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How lenders workout whether you can afford a loan

Different lenders use different formulas to work out how much you can borrow.

Being able to secure your ideal loan amount can seem like a battle of balances. Once you’ve worked your budget and finances through a spreadsheet, there’s still the one issue left to deal with: assessment rates. This is also known as an ‘interest rate buffer’.

Getting in while the going’s good and securing your loan while interest rates are low doesn’t change the fact that lenders are compelled to ensure that you will be able to make repayments if interest rates fluctuate.

Matching the features of a loan to your financial position is important, and often requires a third-party expert to help guide you through.

It is important is that people consider the ramifications of exposing themselves to debt. When assessing costs, it is better to be conservative with the numbers being used.

Assessment rates add a margin to the variable or fixed interest rate of the loan. The assessment rate provides added protection that a borrower will be able to repay their loan when interest rates rise, because they are sure to rise and fall throughout the life of a loan.

APRA is clamping down on lenders exposing people to too much debt and not preparing them for interest rates as well as they could have.

The assessment rate can be anything from 1.5-2% above the variable rate, depending on the lender, and many are currently using rates of approximately 7.5% to 8%. Mortgage assessment rates and methodology vary from lender to lender, which is why different lenders may offer people in the same financial situation different loan amounts.

In some cases, the difference in loan amounts offered by different lenders can go into tens of thousands of dollars.

Give us a call on 1300 252 088 to find out more.