Switching Home Loans – Is it a suitable alternative for me?

Switching Home Loans

Is the cost of switching home loans worth the potential interest rate saving? That is what we’ll help you to find out.

Your home loan is usually your largest financial commitment. We understand that changes in interest rates can have a big impact on your monthly repayments and how long it takes you to pay off your loan.

Switching home loans might cost you thousands in early exit fees and other required fees, but it could possibly SAVE you thousands of dollars as well.


Exit fees on home loans were banned from 1 July 2011. They may still exist on home loans that originated prior to this date. Fixed loans usually include a break fee for exiting before expiry of the fixed term.

  • But how will you know?
  • How will you compare each new lender’s offering against others?
  • What new conditions will accompany a new loan?

When you contact us we will compare your existing loan with other lenders’ products.

We will use the following steps to help with switching home loans:

1. LoanPlanners SA will shop around for you

Our financial calculators are used to compare interest rates, fees and features of your current loan with several other home loans available in the market.

We might also be able to negotiate (on your behalf) a discount below the listed interest rate, especially if you have a large loan. Also, we can talk to your current lender and tell them you are thinking of switching home loans to a cheaper loan offered by another lender.

They may offer to reduce the interest rate or suggest a cheaper ‘no frills’ loan. This could save you significant costs when switching home loans. Often, by using us, your mortgage specialist, we can secure a better rate than if you try to negotiate this yourself.

2. We research the potential savings from switching home loans

Our role is to calculate the fees you will be charged if you switch home loans, plus other expenses you may need to pay eg lender’s mortgage insurance (LMI).

We will show you how long it will be before you start making savings after the cost of switching home loans. We can also compare the minimum repayments of potential new loans.

3. LoanPlanners SA will compare home loan features against your existing loan

We determine a range of potential loans that may be suitable for your circumstances and check them against your existing loan. Different features will be compared, such as:

  • the ability to make extra repayments
  • having an offset account
  • having a redraw facility

You may pay more for a loan with extra features and flexibility so we will need to determine if these features are important to you and whether they are worth the extra expense.

You decide, then we help you take action

We will present to you the potential cost savings and differences in features between loans.

Please note:

You will only reap the potential savings if the new loan stays cheaper over the long term. The longer it takes for switching home loans to save you money, the greater the chance that the interest rate savings may fade.

Your savings can be used to pay off your new mortgage more quickly or make lower repayments to alleviate some of your current financial burden.

If you decide you would be better off switching home loans, then let’s take action together!

Disclaimer: This article is generic in nature. All finance and investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of investment action. This is not deemed as advice.

Mikal Howard

A previously devoted toolmaker/machinist turned Mortgage Broker and passionate property investor from Adelaide. Twitter

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