While new borrowers can benefit from lower rates than existing home loan customers, refinancing or renegotiating can result in significant savings, mortgage experts say.
But shopping around can result in big savings.When it comes to home loans, loyalty simply doesn’t pay.
“But we know that the savings available, if you were to move on to the rate new customers get, is around 0.5 per cent. Which if you put out over [an average] 30 year home loan is $110,000. There's not many things you can do in this day and age to save $110,000. And I'd say either negotiating or refinancing your mortgage is certainly something you should look at, particularly if you haven't done that for a year or so.
“Loyalty doesn't pay. You either have to shop around and look for a better deal elsewhere or you have to contact your lender directly, and say, ‘Hey, I've seen better deals on your own website for the same type of loan, can I get that same rate?’ They really do often make you do the work yourself to get a better deal.”Shopping around for a better deal on your home loan and switching to a lender that offers a lower rate may be a bit of a hassle, but it can pay off in a big way.
While refinancing takes a few hours of work, it's “absolutely worth it because the savings can be so big”, Mr Whitten said.
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