Look before you leap into refinancing

Mortgage holders should carefully weigh up their options before shifting to a rival lender, says Loan Market Group's chief operating officer Dean Rushton who said controversy over interest rate hikes and bank fees has resulted in an increase in refinancing enquiries. “Our advice is to think before you leap,” Mr Rushton said.

“It may take several weeks before all lenders put their rate and fee changes in place, including fixed rates, so until you know what the reshaped market looks like, the risk is that you make a costly decision.”

ASIC’s new legislation, which requires banks to justify their exit fee charge, has added extra uncertainty to the mortgage industry and must be considered by consumers, Mr Rushton said. “Exit fees are under scrutiny at the moment and even if you are looking to refinance with your existing lender, then it is definitely worth waiting to see what happens with these fees.”

Source: The Advisor