For the last two years my home loan interest rate has been slowly creeping up. It started off around 3.89% and is now at 4.07% with one of the Big 4 banks. This has prompted me to look into other lenders to see what is on offer.
House Value: $450,000
Current Mortgage Balance: $284,000
4.07% Variable Principle and Interest
$395 annual package fee
2 years into a 30 year loan. (planning on paying off loan over next 5/6 years with extra payments)
After contacting my current lender they have agreed to drop interest rate down from 4.07% to 3.92%
1 Email = Savings of $426 per year! not bad for 2 minutes of work.
I also search for best deal online.
Best rate: 3.59% Variable P/I no offset but redraw. $0 annual fees
If I switch to this online lender, I would be saving $937 per year in interest + $395 annual fee = $1,332 per year!
There are a few fees in switching lenders to consider, discharge fee for my current loan $300, property title fee $179 and potential settlement fee $150.
I would also need to switch my everyday bank account over to avoid monthly fees to a fee-free online account. This would also involve contacting all direct debits to switch over.
If I switched over I wouldn’t have a offset account, this shouldn’t be a issue as I plan to pay the loan off early and never want to create a Investment Property out of it.
Should I do the paper work and make the switch?
What your current interest rate?