Should You Refinance?

Interest rates are at historic lows. But at least half of the mortgage market is still paying way too much than they should be.

You need to make sure you're have your options checked by a good broker - like Local Mortgage Specialists - at least once a year.

He's some of the most common questions we get asked when it come to refinancing.

My lender is charging me a higher home loan rate than I see advertised elsewhere. Can I change lenders?

This is exactly the reason why most people change lenders. When shopping around it is always important to look for the comparison rate of a product. A comparison rate is essentially the true rate, taking into account the fees and charges you will pay on the loan. So even though you see a lower rate it doesn’t mean the repayments are less. We're able to take the hassle out of this for you, show you the best rates on offer for your circumstance, and any hidden fees or charges.

I have just come off a ‘honeymoon’ interest rate to a much higher rate. Can I move lenders or am I locked into my mortgage? You can walk away from most mortgages, although if you have a fixed rate loan that can be more difficult. “Honeymoon” or “Introductory” rates can often look enticing but will likely also hold some nasties, like a big jump in rate after the “Honeymoon” period. To review your options, give us a call and we'll come and chat.

If I move my mortgage to a new lender, is there anything stopping that lender from increasing their rates in a few months time? This depends on what kind of product you have and the lender you choose. Big lenders are often more reactionary to changes in the wider market, while the smaller lenders based their business on being cheap – therefore they need to be cheap to survive. Consider a “white label” lender. Like when you go shopping, white label products are cheap as they don't have the branding, or infrastructure around them to pay for and therefore can offer cheaper rates. And if you’re still concerned about rising rates, perhaps you should consider a fixed rate home loan.

Why do some lenders charge more than others for lending the same amount of money? Banks and other lenders pay different amounts for the money they on-lend to you, they have different overhead structures and different profit expectations. All these factors affect how much they charge to lend people money. Different lenders will also apply a different process to your circumstance, which is one reason why some lenders might be cheaper that others. And of course there are some lenders who are just plain expensive.

What extra documentation do I need to refinance? Apart from the normal requirements of ID, and income evidence (payslips, group certificates) you will also need at least 6 months of mortgage statements to prove you've been paying your current loan on time. Of course we will provide a list of all the documentation that is required.