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Homeowners switch mortgage deals twice as often

Homeowners switch mortgage deals twice as often
Date of Publication: Friday, 21 February 2014 15:37

Homeowners are taking advantage of a competitive marketplace by switching their mortgage providers more often for a better deal.

 

The low interest rates and increased competition has prompted customers to look round for better home loan deals more often.

 

Homeowners are now seeking a refinancing option every three to four years in the pursuit of better rates, according to ING Direct – around half the average of seven years recorded back in 2009.

 

This tallies with data from the Australian Bureau of Statistics, which shows that the number of completed refinancing deals has grown by 79% in December 2013 from January 2010 levels.

 

John Arnott, the Executive Director of Customers at ING Direct, said the improving mortgage market made customers realise that switching was the often the best route to achieving a better deal.

 

“They want the best possible deal and increasingly this means switching providers,” he said.

 

“People are very focused on staying ahead with their home loans and the current low interest rate environment has helped them pay down their loans faster.

 

“This focus on paying down mortgage debt means that they are more willing to switch providers to get a better deal.”

 

Can you negotiate with your current lender?

But customers with a decent relationship with their lender may have built up some leverage to negotiate with their current provider.

 

The more equity you have for a refinancing arrangement, the more attractive your custom will seem to a lender, who may then be prepared to offer a cheaper deal.

 

If you spot a cheaper rate with another bank, your home loan provider may offer you a better deal if you threaten to join a rival.

 

But it’s worth having another lender in mind, because you may end up having to switch if your negotiations with your current provider fail.

 

Keith McDonald
Which4U Editor

 

If you found this article helpful, you can find more from us at our Finance Blog.

Friday, 21 February 2014 15:37
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