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Managing your home loan
Tweaking your mortgage could save you thousands of dollars, putting some extra dollars in your back pocket for when you need it. It's not only about getting a better interest rate, but structuring the mortgage in the right way too.
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Save thousands over the life of your loan
We're not talking peanuts here. We're talking tens of thousands of dollars. A review costs nothing but could save you buckets of money. Seems like a no-brainer.
If your lifestyle has changed, so should your mortgage
Maybe you've started a family, maybe you've retired. Whatever life stage you're at, make sure your mortgage is structured in a way that suit your needs right now.
Stay on the best interest rate
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.
You don't necessarily have to switch banks to get a better rate
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.
Access to more banks and no incentive to push you towards one over the other means more options and a better deal
Plus a network of over 5,000 peer-to-peer lenders
Not only do we have access to more banks than other brokers, but we have a community of over 5,000 peer-to-peer lenders for a custom solution if you don't quite fit the bank's box.
Make sure you understand all of your options
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.
Confirm fixed rate break fees
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.
Factor in legal costs
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 alongside Squirrel.
Make sure the financial benefits outweigh the costs
The main reason people refinance is to get a better deal. The benefit can be a lower mortgage rate and a cash-back contribution. To make sure it's worth it, you need to weigh up the benefits against the costs of refinancing including break fees and legal costs. What usually makes it worth making the switch is the cash-back.
A cash-back contribution is a lump sum given to you by the bank at settlement. It can be as much as 1% of the amount borrowed, but depends on what's happening in the market. There are conditions though, and the money can be clawed back within three years if you sell the property or move to another bank within that time.
What's a break fee, and why does it have to get paid?
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.
So is it worth breaking my fixed term?
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.
Can I break out of a fixed term loan to get a better rate?
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.
What happens if I sell my house?
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.
Anonymous
New Zealand
Really happy Basil was amazing, very efficient, great communication and he worked with us to get a good result. Would recommend him to others[N
Luke Murray
New Zealand
It was a great experience. The refinance helped me greatly and put me in a position to keep my apartmentLM
Ryan
New Zealand
The service I got from Squirrel was extremely efficient. They dealt with my loan so easily and achieved a result greater than what I was expectingR
William
New zealand
Sudam our advisor was so helpful, patient and knowledgeable and made the whole process super easy with a great final resultW
Ryan Grant
New Zealand
Alex McRobbie was awesome! Informed knowledgeable and understanding! best outcome and awesome person to deal with! Couldnt recommend highly enoughRG
Martin
New Zealand
Helped me get an improved rate and sorted out my needs. Great communication, kept me up to date throughout the process.M
Dan Clark
New Zealand
Kat McInnes was so helpful and a pleasure to deal with.Kat made the whole experience less stressful and so straight forward. I would have no hesitation in recommending Kat to anyone who needs any help with Mortgage lending.DC
Denoa Amoa
New Zealand
Eleanor was very communicative, explained to me the best options and structure available, and guided us through what was a complicated process due to the structure of the ownership.DA
