Lenders price competitively to win new borrowers, and rely on existing ones not checking. Finding out where you sit costs nothing and takes about fifteen minutes.
Refinancing means moving your existing home loan to a different lender, or restructuring it with your current one. In practice it is a small amount of paperwork, one valuation, and a few weeks during which we handle most of the follow-up.
Lenders spend heavily to acquire new borrowers and comparatively little to retain existing ones. The result is that the rate on your loan today is often worse than the rate the same lender is advertising to new customers.
The difference sounds small as a percentage and is not small as a number. On a $700,000 loan, half a percent is roughly $3,500 a year, and considerably more across the remaining term.
Refinancing is not free. The costs are usually:
Against that, many lenders offer cashback or waive fees to win your business. We set out the full picture: the cost to switch, the saving, and the point at which you are genuinely ahead. If that calculation does not work, we will tell you. Our guide to working out the break-even shows the method.
Sometimes staying put is the right answer. A large fixed-rate break cost, a loan with only a few years remaining, a recent change of employment, or an offset arrangement you would lose can each make switching the wrong move this year. We would rather tell you that than place a loan that does not benefit you.
Rate is the headline, but not the whole story. Refinancing is also how people:
A comparison rate on a website cannot tell you which of these applies to you.
Your balance, rate, lender, loan type and remaining term. Your most recent statement tells us most of it. Nothing touches your credit file.
15 minutesWe compare more than 75 lenders, establish the switching costs including any break fees, and calculate the point at which you are genuinely ahead. You receive it in writing.
A day or twoDocuments, valuation, approval and the discharge request to your existing lender. Discharge teams are typically the slowest part of the process, and following them up is our responsibility.
2–3 weeksThe loans change over, generally without anything required from you on the day. We then review your numbers every year.
Then ongoingSpeaking to us does not touch your file. A formal application creates an enquiry, which is normal and expected. What damages a file is applying to several lenders at once and being declined repeatedly, which is what selecting the right lender first time avoids.
You can, but a break cost may apply and it can be substantial. It depends on how rates have moved since you fixed and how long remains. We can obtain the exact figure from your lender before you decide anything.
Lenders generally want you to retain at least 20% equity to refinance without paying LMI again. Below that it is often still possible, but the figures need checking carefully, because paying LMI a second time can cancel out the saving.
Usually, yes. A higher valuation improves your loan-to-value ratio, which can access sharper rates, remove LMI, or release equity for a renovation or another purchase. It is one of the most common reasons refinancing is worth reviewing.
Different rather than harder. Lenders vary considerably in how they treat business income, add-backs and shorter trading histories. Some require two years of tax returns, others will work with less. Knowing which lender to approach is most of the work.
No. Your home loan and your everyday accounts do not need to be with the same institution. Many clients move the mortgage and leave everything else where it is.
If you are already on a competitive rate, we will tell you that.