Costs of switching your mortgage
Switching your mortgage to another lender will save you money on your home loan but will incur fees in the process.
Educate yourself on the following fees to avoid any nasty shocks when you move your mortgage to another bank.
Mortgage discharge cost
Read the fine print of your home loan to see if your current lender includes this fee for leaving your home loan. This fee could range from $150 to $500. Speak to your current lender, and you may get a discount on your mortgage discharge cost.
Lenders Mortgage Insurance
Your new lender will need to perform a property valuation. Valuations that are lower than planned will require mortgage insurance. Make sure your property valuation is higher than 80 per cent of your loan amount to avoid this.
Stamp duty on a new document or contract will incur a cost. Look to online stamp duty calculators to give you a general idea of the exact charge but stamp duty should be 0.35 per cent of your loan cost.
Fixed rate loan penalties
Your financial institution will charge you for breaching the agreed terms if you are switching funds in the middle of your fixed-term loan.The fee will vary according to the conditions of your home loan but can be in the thousands.