Switching lenders has never been more popular
Refinancing has reached record levels, according to new data from the Australian Bureau of Statistics.
A record 33,712 Australians refinanced in May, the most recent month for which there are stats. That was up 30% on April, which was itself a record.
Of those who refinanced, 64% moved to another lender, while 36% stayed with their current provider.
There are two reasons why refinancing is so popular:
- Interest rates are at record-low levels
- Lenders are competing hard for business, with cashback offers and other deals
While refinancing is a good decision for many borrowers, it won’t suit everyone. Here are some questions to ask:
- Will you have to pay money to close your current loan early?
- Will you be forced to pay LMI (lender’s mortgage insurance) if you switch?
- Will your new loan revert to a higher interest rate after a honeymoon period?
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