Will The Increased Bank Competition Save You Money?

This is an email question from Stuart in Nollamara, Will the offers that the banks are offering save me money if I refinance my mortgage?

This is a good question, considering all the news at the moment with both Westpac and National Australia Bank starting aggressive marketing campaigns to win more home loan business. Both banks are offering interest rate discounts, fee waivers and NAB even offering to reimburse some mortgage exit fees if you refinance your current mortgage to them (conditions do apply).

It is always a good idea to understand what your current mortgage is costing you. You may be able to save money or pay off your home loan sooner, by switching home loans, either with your current bank or refinancing to another lender. These offers may be of benefit to you, but you should know exactly what it will cost to close your current mortgage, and open a new mortgage, either with your current lender, or another bank or lender.

The type of fees that may be incurred to close your current mortgage may include –

1/ A deferred establishment fee (can range from nothing to $700 plus, depending on your current bank or lender)

2/ A settlement fee (Can range from nothing to more than $300)

3/ Government charges (things like a mortgage registration fee, title search fee, can be around $300)

4/ If you have a fixed rate home loan, there maybe an exit fee on a fixed rate home loan.

The fees to open a new mortgage account maybe –

1/ An application fee (Can range from nothing to $600 plus)

2/ Government charges (things like a mortgage registration fee, title search fee, can be around $300

3/ If you are applying for a fixed rate home loan, a rate lock fee may apply.

4/ If you borrow more than 80% of your property value, a lenders mortgage insurance fee may apply.

There are many things to consider, when considering refinancing your home loan. A good understanding of what it will cost to refinance your mortgage, will help you in your decision to whether it will save you money. All banks and lenders have different rules and fees, so this is where my services as a mortgage broker, may help you in your decision whether to refinance or not. I can give you a cost analysis, to see, taking the fees into consideration, the possible benefits of refinancing or restructuring your current mortgage.

Its good to see some competition in the banking sector, will it save you money? It just might, and it certainly doesn’t hurt to ask any questions.

If you have any comments, please leave below. If you would like a cost analysis, to see if you could save any money, or to use my services as a mortgage broker, please contact me anytime.