Refinancing is often an excellent path to a better financial position. Rising interest rates and cost of living pressures can wreak havoc on your life. But refinancing allows you to access the best interest rates possible, find a better product for your situation and get your finances back under control.
One of the questions we’re often asked by clients is ‘can I change mortgage lenders’ when refinancing? Well the answer to that is a resounding yes. And here’s why you should consider doing just that.
What is home loan refinancing
To start, let’s talk briefly about home loan refinancing. Refinancing a home loan simply means changing your existing mortgage product for a new one.
There are several reasons you may look to refinance your home loan. And one of those reasons may be that you’d like to change lenders.
Can I change mortgage lenders when refinancing my home loan
The short answer is yes, absolutely you can. And there are lots of reasons why you might want to do just that. Changing mortgage lenders when refinancing could give you:
- Better mortgage features and repayment options. Different lenders will offer different products, and different mortgage features. A new lender might have just the product you’re looking for.
- Lower mortgage fees. When you look at new lenders, you can often find one that offers lower mortgage fees, or even waives fees for new customers. Lower fees means less costs to manage your loan, and that will put you in a better financial position.
- A lower interest rate. When you move to a new lender they’ll often offer you a ‘new client’ rate which is lower than their normal base rate. A lower interest rate adds up to significant savings over time. You’ll pay a lower amount each month, as well as over the lifetime of your home loan.
- Refinance cashback offer. Some lenders offer refinance cashback offers. These can be as much as $10,000 dollars (though usually they’re much less). This liquid cash can give you immediate relief from the pressures of a challenging economy and can offset the costs of refinancing.
- Better customer service. Some lenders are known for their customer service. And some aren’t. Changing lenders when you refinance gives you the option of getting involved with a lender that will give you the customer service you deserve.
Be aware of fees and costs of refinancing
There are costs involved if you decide to refinance, regardless of whether you stay with your existing lender or move to a new lender. These may include:
- Fees to discharge (settle or terminate) your existing mortgage.
- Fees to release your mortgage.
- A fee to ‘break’ your mortgage before its full term.
- Application fee for a new mortgage product.
- Lenders’ Mortgage Insurance (if your home equity is less than 20% of your home’s value).
- Fee to value your home.
- Fee to register your new mortgage.
These costs shouldn’t discourage you. But it’s important to know the costs of refinancing, to make sure they don’t counteract the potential savings made through refinancing.
When can you change mortgage lenders when refinancing your home loan
When you’re refinancing your home loan, you’re welcome to change lenders to one that you’re happier with. A different lender may have home loan products available at a lower interest rate or that better suit your personal circumstances.
Of course, if you have to break your existing mortgage agreement, there may be fees and penalties involved. It’s a good idea to review your home loan contract and talk to your mortgage advisor to see if it makes financial sense.
How long does refinancing take
The refinancing process takes, on average, around four to eight weeks. The time taken will vary due to your lender’s home loan application process, the complexity of your home loan and your own personal circumstances.
Lending Loop – Your refinancing specialists
There are many reasons you may seek to refinance your home loan, and yes, you can change mortgage lenders when refinancing! Refinancing with a new lender can help your financial short-term goals (through lower monthly repayments) as well your long-term financial goals. Refinancing can also help you to access equity in your home to renovate, travel, consolidate debts or purchase a car.
No matter your personal circumstances, having a specialist mortgage broker like Lending Loop on your side can help you through the refinancing process and find the best home loan product for you.
If you’re in the market for a better deal, Lending Loop can help. From over 40 of Australia’s biggest specialist lenders and banks, we can find the right home loan for you. Give us a call at Lending Loop today!