We don't like to be the bearer of bad news, but interest rates have bottomed out and they're on the rise.
It could be worth refinancing to a different bank, or getting us to negotiate with your current one to lock in a low rate before they increase further. We can help you work out the best mortgage structure for minimal impact to your wallet as well.
Getting just a small amount shaved off your interest rate can make a difference to your monthly payments, leaving you more money for the things you want - not to mention getting your home loan paid off quicker.
Your Squirrel mortgage adviser can often renegotiate your mortgage with your current bank, saving you the hassle of switching if you're happy where you are.
Maybe you've started a family, maybe you've retired. Whatever life stage you're at, make sure your mortgage is structured in the best possible way to suit your needs right now.
We're not thinking peanuts here. We're talking tens of thousands of dollars! A review costs you nothing but could save you buckets of money. Seems like a no-brainer.
Not only do we have access to more banks than other brokers, but we have a community of over 1,000 peer-to-peer lenders for a custom solution if you don't quite fit the bank's box.
Sometimes when reviewing your mortgage we might find that the best solution is switching you to different bank. In this case the bank your mortgage is with will charge what's called a "Break Fee". This is because you are breaking a legal contract between you and the bank. The bank incurs a real cost as a result, which is then passed on to you. They’re not just trying to squeeze you for a bit more.
Generally speaking, the longer the remaining time on your fixed term or the bigger the difference between your current interest rate and the new rate (if switching from a higher rate to a lower rate), the higher the break fee.
There are circumstances where it’s worth breaking your fixed term, but it could also end up costing you more in the long run. Every situation is different so get in touch with one of the team to help you work out what’s best for you.
It might be possible to break out of a fixed loan before the term is up, but you’re likely to be charged a break fee for doing so. This is because the bank is incurring a loss by you breaking the term early. This loss is passed on to you in the form of a break fee. There are some instances where it’s worth breaking your fixed term, but it could also end up costing you more in the long run. Every situation is different so get in touch with one of the team to help you work out what’s best for you.
If you sell your house to buy a new one while still under a fixed term, you may be able to transfer the existing loan and rate to the new property. If you’re repaying your loan once you’ve sold, you may have to pay break fees. Before you sign anything, get in touch with one of our team to chat through your options.
The only way to be certain you won’t have to pay break fees is to make sure you don’t break your fixed term early. So before you fix for any period of time, ask yourself if you’re planning on selling in that timeframe, and also to what extent you will feel regret if interest rates were to drop and you were stuck on a higher rate? There are ways to set up your mortgage to take advantage of the certainty of fixed terms but also retaining the flexibility of floating rates. Talk to one of our advisers to help get the perfect mortgage structure for your situation.
One of your options is to stay put. Your existing lender will be prepared to sharpen the pencil to keep you as a client – it is just a question of how much. What can be frustrating is that you will likely need to get an approval elsewhere before they will match it.
When it comes to refinancing it might be pricing or it could be due to another lender having a better policy or product, or if you own multiple properties it could be to diversify the risk of having all of your lending in one basket. Make sure you know all of your options. If you set out financial goals that you are working towards, this will make it easier to make decisions.
If you have multiple loans on fixed rates, then chances are you will incur fixed-rate break fees. These can be significant and add up to several thousand dollars. Essentially, a break fee will equal the interest you save by switching your mortgage to a new, lower rate, so there is seldom a big financial benefit to refinancing. The savings from a new lower mortgage rate will offset the break fees.
When you refinance you may need to use a conveyancing lawyer which will cost around $900. There are some free refinancing services that you can use in conjunction with Squirrel.
Most refinancing is price related. The benefit is a lower mortgage rate and a cash-back contribution. This needs to be netted against the costs of refinancing including break fees and legal costs. If there is a net benefit it usually relates to the cash-back.
A cash-back contribution is a cash lump sum given to you by the bank at settlement. It is a genuine cash back but can be clawed back within three years. It can be as much as 0.80% of the amount borrowed, but depends on market conditions.
A cash-back can make it opportune to refinance and lock in a new, lower mortgage rate before they go up.
Auckland 0600, New Zealand
Always a great service, even when what was needed is a little confusing they are able to explain it and help get the best for us.G
Orewa, New Zealand
Emma is just the best. We've had a long standing relationship with Emma. She understands us and our goals and moves heaven and earth to make things happen.J
Auckland, New Zealand
Big thanks to Kyle for his patience, persistence and absolute hustle to get us across the line, going above and beyond.S
Professional approach, prompt responses, clear communication and excellent result focus. Over all highly satisfied.A
Vikram Katukam has helped us through re-financing. He did an awesome job getting us the first home loan and re-financing at the right time to ensure we get our cash offer and best rate as well from the other bank. Great work!!!P
Appreciated Squirrel did not give up after initial decline from the bank on the mortgage application, happy to say we go there in the end.L
Auckland, New Zealand
Thank you so much to the amazing Lindsay Hill for helping me to achieve another life milestone, first in 2016 with my own home and now in 2022 with a rental. First class customer service, industry knowledge and patience with my many questions :)M
Auckland, New Zealand
My squirrel broker Jessica car went above and beyond in her professional advice and support during my application . She is an absolute gem. I am forever grateful Regards AnthonyA
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