Don’t be the only elephant in the room – mortgage holders should be cautious about making hasty decisions about moving their home loan following offers of cash incentives, reduced interest rates and new product offerings by the major banks.

Don’t be tempted to ‘jump ship’ without first considering exactly what is on offer and what your long-term home loan needs are.

Testing the water

Moving your mortgage is something that should be done only after careful consideration because decisions made in haste can often have long-term negative consequences.

There are costs involved with moving your home loan, so you need to make sure the benefits outweigh these and your Trusted Mortgage Broker can justify any recommendations.

There are new rules to protect you

Under consumer credit regulations, a Trusted Mortgage Broker needs to:

• show the product and lender are deemed ‘not unsuitable’
• be able to demonstrate the benefits of taking out a home loan with another lender
• explain why a specific product and specific lender is being recommended.

It can be costly to move

One of the key considerations when moving your mortgage is the cost.

While the Federal Government’s intention is to abolish home loan exit fees, your existing lender may also charge ‘other fees’ which can include a discharge fee, administration fee and any other hidden fees with your transaction account.

Equally, it’s good to be aware of fees that your new lender may also charge, such as an application fee and government charges associated with the registration of your mortgage and searches.

But, that’s not all

There’s much more to your home loan than just the ‘headline’ interest rate. While you may hope to save money and reduce costs by moving lenders, there are lots of other considerations, such as loan features and loan structuring.

It may be that you have a basic home loan now but you want one with additional features, such as a repayment honeymoon or a redraw facility, because one partner is going to stop working for a while to stay at home with a new baby.

Or, you might have a home loan with all the ‘bells and whistles’ that you don’t end up using or one that doesn’t allow you such easy access to your funds is a better fit?

If you’re thinking of moving to another lender, test the water first by speaking to a Trusted Mortgage Broker.

Trusted Mortgage Broker has a great range of mortgage calculators to help with all those tough decisions that come with finding the right loan. Have a look at our calculators on our website to help you further. www.trustedmortgagebroker.com.au/calculators/

About the Author

Sue Hayter

Sue's service commitment is fantastic. At Trusted Mortgage Broker we work with our clients to ensure they understand their options, know exactly how much they can borrow and ensure they choose the right home loan and the right lender that is not unsuitable to their individual needs.

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