Switching from Principle & Interest, to Interest Only
Many of our clients upgrade their housing to a new home but keep their existing as an investment. In this scenario, we often, with the advice of an accountant, opt to switch the home loan into an interest only feature for between 1 to 5 years. This is the most common reason to switch. People experiencing short term cash flow issues may opt to switch their home loan into interest only for a year until the budget pressures are off. This might happen when you have a new child and maternity/paternity leave is taken, for instance.
Switching from Interest Only, to Principle & Interest
Sometimes you may wish to re-align your financial goals. If times are good and cash flow is strong and steady, why not start to hammer some of the principle off your investment loans? We have a great range of calculators here on our website that will help you work out what repayments will meet your target. Click here for our calculators.
Switching from Standard Variable to Fixed
Thinking of locking your interest rate in? Most banks have a 1,2,3,4 and 5 year fixed option to help you and your family budget for repayments. With fixed rates being at record lows, many of our clients are considering a switch to fixed. If you're not sure you can always opt to split your loan into part fixed and part variable so as to hedge your bets a little both ways.
Switching from Standard Variable to a Basic Home Loan
Loans that are a little older tend to be on less competitive rates, when people ring us we sometimes simply discuss the option to switch into their current lenders basic home loan which will mean a cheaper rate, but less features. We can discuss whether or not there is a benefit and what features are important before you opt to do so.
Switching a line of credit into a standard home loan
So many people have lines of credit that are maxed out and no longer being paid off, perhaps it's time to switch to an amortising home loan that you can pay down over the next 25-30 years. They tend to hang around indefinitely if you don't.
It is not always necessary to refinance for a better option. If you're not sure about your home loan, feel free to contact us to have a review of your current rate, product options and to obtain assistance in switching.