A lot can change over few years. You might have more mouths to feed, want to save some money or be thinking about renovating or upgrading to a new property. So maybe your home loan doesn’t suit you as well as it used to.
If you are planning to transfer your Home Loan, there are few things that you need to consider to ensure that transferring your loan is benefitting you.
A new loan with more features
If the situations have changed and there are some features that you have not thought before that can prove useful today. For example lines of credit, offset accounts, repayment holidays, etc. All these features may not be available for your current Loan so note down the features you want and begin your research for another lender.
Switching loans v/s switching lenders
When you have decided the features you require, inquire if your present lender offers these or consider switching you Home Loan to another lender.
Check your loan and identify if there are any restrictions, fees or charges for switching loans. The charges, you need to pay, depends on the factor that you want to move to new product or move to another lender.
Check If you current lender charges fees to switch to a new product. If not, then it can be the best and cheaper way to get the features you need in your new loan compared to changing banks.
If you Transfer your loan to other lender, then you may have to pay charges for it. All these charges depend on your current as well as the new lender. So, makes sure that you go through all the details regarding fees and charges before thinking to switch.
Switching from variable to fixed rates and vice versa
Whether you choose to stay with or leave your lender, whether the Interest Rates are fixed or variable can cost you big.
Fixed to Variable
It is probably easier to transfer your loan from fixed to variable as the fixed rate means that the interest rates remain constant for a particular period. If you close the loan, then you may be charged economic costs.
Variable to Fixed
If you shift from variable to a fixed rate, you need not worry about the economic costs. But you may have to pay exit fees for transferring to a different lender.
Consider loan tenure and repayments
With the loan features, you also need to consider the interest rates and repayment amount. A longer tenure means lower EMIs and high-interest rates by the end of the term. But in case of shorter tenure, your repayments will rise so ensure that you can afford this in your budget.
How to make a switch
When you have decided to switch the loan, the next step is to apply. You can apply for it online or visit the branch.