Switch Home Loan
A lot can change over a 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 switch 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.
When you have decided on the features you require, inquire if your present lender offers these or consider switching your 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 a new product or move to another lender.
Check If your 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 lenders, 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 a 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 to 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.
Know more about home loan eligibility.