Hi All,
I'm looking to refinance as it's been about 3 years since I moved over my homeloan and there current offers are not competive, I called them up advising I'm looking around and they wouldn't match any other bank.
Currently with CUA 200k at 4.26. No fees
Looking at Bank west 3.72 no fees
Does it look bad on my credit rating if I make a move every 3 years or so years?
^This is solid guidance.
As a general rule of thumb, switching any more frequently than every 24 months is of dubious value (especially for mortgages under $250k) because:
Switching costs (exit fee, state based registration charges, potentially an app or annual fee) have a habit of eroding a lot of the savings. As such, you'd want to double check your calcs so far as these fees are concerned and possibly be chasing an offer that provides some kind of cashback upfront to reduce the recoup period (to justify the switch).
Chumlee is right about getting a bad rep with lenders. Typically this is a phenomenon we see with people that switch more frequently than every 24 months. Why? Lenders are getting more sophisticated with respect to identifying time wasters. If your credit profile is extremely strong, this may not be an issue. If it is borderline (or worse), both the drop in credit score and litany of previous applications in the past 5 years will not be of assistance with respect to big picture objectives (for example maximising borrowing capacity, getting approved for equity releases for investment purposes or financing a new business). If your objective is to switch frequently, you need to be mindful of ALL your credit applications - not just ones related to your mortgage as they will all have an effect on your credit score.
Opportunity cost of time spent dealing with lender requirements. Depending on how busy your schedule is, switches where the estimated potential net saving is less than $500 (many might argue of less than $1000 - especially where estimates are made with with respect to 'variable' loans) may not justify the efforts of the application & switching process. This is especially so if one is switching all of the bank accounts and credit cards at the same time. If you are gaining new functionality or dealing with a new organisation that you prefer to your existing provider, by all means take the leap. If not, you may wish to consider if your time is better spent addressing other areas where you can improve your financial wellbeing.
Hope this helps.
I have asked for 1 k switching costs as a cash bonus. I'll see why there management say
I was worried if it looked bad on history. I always pay everything on time just so many good deal out there
bankwest 3.72 is for 3yrs intro variable rate though.
Yeh I know I was planning to reassign in 3 years
200k is not much for a bank to go out of their way
Shouldn't make any difference. It's generally quite hard to get your current bank to match others. They rely on you not bothering to move. You're debt isn't huge, so won't be making a lot of money for them. I'm with HSBC at the moment, and they were the first ones who budged when I tried this (debt of over $400k).
Every 3 years or so isn't going to be an issue. Your issue will be costs associated with discharging mortgage so make sure you are well in front as it's a big process.
Also, when you keep flipping lenders you will get to the point where new lenders will reject you as they can see you don't stay long enough for them to bother with you.