Should you refinance?
“My lender is charging me a higher home loan rate than I see advertised elsewhere. Can I change lenders?”
This is exactly the reason why most people change lenders. There may be a penalty clause in your current home loan, meaning you may need to pay a discharge fee, but it could still be in your financial interests to change.
When shopping around it is always important to look for the comparison rate of a product. A comparison rate is essentially the true rate, taking into account the fees and charges you will pay on the loan. So even though you see a lower rate it doesn’t mean the repayments are less.
“I have just come off a ‘honeymoon’ interest rate to a much higher rate. Can I move lenders or am I locked into my mortgage?”
You can walk away from most mortgages, although penalty fees sometimes apply to fixed rate loans.
“If I move my mortgage to a new lender, is there anything stopping that lender from increasing their rates in a few months time?”
It depends what kind of product you have. If you’re concerned about rising rates, perhaps you should consider a fixed rate home loan, where repayments are fixed for a period from 1 to 5 years.
“Why do some lenders charge more than others for lending the same amount of money?”
Banks and other lenders pay different amounts for the money they on-lend to you, they have different overhead structures and different profit expectations. All these factors affect how much they charge to lend people money.
“What documentation do I need to refinance?”
The last 3 – 6 months of mortgage statements is sufficient to begin this process. I can advise on other documentation.