Did you know that when you take out a variable or split home loan, you may not be stuck with the rate you signed off on?
Through repricing, you may qualify for a lower interest rate and could put more money back in your pocket.
It’s a simple process that could help you save more, without the hassle of a refinance.
While you may not qualify for repricing if you’re on a fixed-rate loan, there are other options you can explore to save money. Check out this article for more details.
What is repricing?
Repricing is when you or a mortgage broker negotiate with your current lender to get a lower interest rate on your home loan.
Having experience negotiating with a bank is a big advantage when repricing. That’s why it’s usually better when a broker does it, as it’s part of their job.
Repricing is similar to refinancing but much simpler. Instead of changing lenders and loan products, you are only changing your interest rate.
It’s also worth mentioning that a mortgage broker is legally obliged to act in your best interest when it comes to your home loan. So, when a Nectar broker negotiates with your bank, you can rest assured that they will work to get you the best rate possible.
Advantages of repricing over refinancing
There are four major advantages to repricing.
- No paperwork: When repricing, the only information your broker needs is your loan account number, your current variable rate and the balance of the variable portion of your loan. This is far less paperwork than you’d need to provide when you refinance, as the bank will already have your information.
- Quick: Anyone who has taken out a mortgage knows how slowly banks move sometimes. Refinancing can take time too since you’re opening a new loan with a new bank. On the other hand, repricing is an internal process with your bank. So, it doesn’t take nearly as long.
- Affordable: Refinancing sometimes comes with significant administrative costs. Repricing, on the other hand, incurs no cost from the lender.
- What application process?: Once you’ve sent the information your broker needs, it’s their job to negotiate with your bank on your behalf and find out if a reprice is possible for you. In other words, you do next to nothing during the application process.
Am I eligible for repricing?
Remember, only a variable loan or the variable portion of a split loan may qualify for repricing.
The following factors could also work in your favour:
- Your Loan-to-value-ratio has decreased since you settled your loan. This could be because your property’s value has increased and/or you have paid off a fair amount of your loan principal.
- Your bank is now offering your loan product to new customers at a lower rate.
However, you may still qualify for repricing without meeting these criteria – it always pays to ask your broker anyway.
Are you on a fixed-rate loan? Is it expiring soon? We could help you get a better rate. Get in touch and we can discuss what strategy works best for you.
Is there a downside to repricing?
In a word, no!
When it comes to repricing, as long as you are engaging with a broker:
- There’s less paperwork involved.
- It’s fast.
- There’s no cost from the lender.
- Your broker handles the bulk of the work.
Start putting more of your hard-earned money back in your pocket today. If you’re interested in repricing your home loan, contact our office on (02) 4040 0910 We’re here to help you.