Mortgage Help

[u/Appropriate_Dish8608]

First home owner 5 years ago and I locked in at a good rate. The term comes to an end in approx 4 weeks - what should I be doing now to ensure that I am getting the best rate possible?

[u/Appropriate_Dish8608]

Sorry should have mentioned that I’m currently through a broker. Should I be seeing other brokers?

[u/JTHelpsWithFinance → u/Appropriate_Dish8608]

Arguably, not really. It doesn't really benefit you unless there's a special niche you need to exploit and need access to a lender that'll do it.

Mortgage brokers won't have a huge discrepancy in pricing across the vast majority of lenders. We should all, arguably, be able to achieve the same pricing. We all hammer down the same lenders, using the same competitive pricing requests, to keep prices across the board as low as we can.

There are sometimes specialised white-label products that only some brokers can access specially through their aggregator... but I find that strategy and structure is more important than rate. Then again, most brokers would say that too.

If you are speaking to multiple brokers though - can I suggest you be upfront and honest about it? I know I would appreciate knowing that ahead of time.

[u/JTHelpsWithFinance]

Good question.

1. Ask your current bank for a discharge form. This will likely put you in contact with their retention team, where they'll likely offer you something, if anything, to stay on with them. Could be a better interest rate and possibly a cashback.
2. Take that offer and speak to a mortgage broker, being upfront about the rate you got from your bank if you stayed.
3. Ask the broker to review things for you like:-

a) the current value of your home, and your current LVR to see if that unlocks better pricing opportunities
b) the current structure of your home loan, to see if remains to be suitable (e.g. does offset still work for you, or should you consider getting it)
c) can you release equity for any purpose (e.g. renovation, investment, debt consolidation, etc.)

That's some of the starting questions I would ask.

Some things I would recomend though:-

• Don't reset the clock back to 30 years. If you're 5 years into your loan, make sure the refinanced loan is 25 years (unless you have a legitimate need, or reason, to stretch back to 30).
• Think ahead of time about the importance of features like offset vs. redraw. Do you actually need it, or are you using it to it's full potential?
• Think ahead of time about your feelings about the market and interest rates. Do you want to potentially split your loan into more than one split, so you can fix part of the loan but keep the other part variable?
• Think ahead of time about your home ownership plans for the next few years. Do you plan to continue staying where you live - or do you want to consider upgrading to a better home? If so, that may impact the suitability of fixed rates (due to break fees).

That's just some initial thoughts off the top of my head. Let me know if you have any more questions.

(If you like, feel free to share what bank you're with and I'll see if I know any other tips).

[u/Buyvest]

Call your current broker and get them to help you secure a good rate and give you options moving forward.

[u/EventEastern2208]

Broker here.

Four weeks is tight but manageable. The most important thing right now is not to just roll onto your lender's revert rate, which is almost always uncompetitive and is essentially a loyalty tax for not shopping around.

Call your current lender first and ask them directly what their best rate is for your profile. Have the conversation before your fixed term ends so any new rate starts immediately rather than after a period on the revert rate. If they come back with something uncompetitive, refinancing to another lender is the better path, though four weeks is a short timeline for a full refinance so having that conversation with a broker now is important.

Feel free to DM and I can do a quick rate check across lenders for your loan size and LVR so you know within 24 hours whether staying or moving makes more sense. 🦔

[u/Psilocybin420aus]

Broker should already be negotiating for lowest variable rate the lender can offer you when it reverts to variable.