Is it worth trying a different bank when my loan comes up to refix?

When your fixed rates are maturing, it is definitely an opportunity to review everything. Will you receive a better interest rate from another provider? In general terms interest rates between the providers do not differ that much however it is always worth checking for special offers.

Is there a cashback incentive? These can go towards the costs incurred when moving providers.

Are there new products available that may better suit your needs? Remember that banks have different terms on their loan products, offering you greater flexibility. Therefore understand the loan product you are already in and what benefits you may have as these should all come into consideration.

What is the market outlook like? Would you be in a better position taking longer-term rates to protect against future interest rate increases?

There are costs of moving and understanding these is important.

The cash incentive given to you when you took out your home loan may be clawed back if you haven’t had your loan very long. This could be in full or pro rata depending on the time you have been with the provider. This could remain an issue for as long as four years.

If you have a number of structures in place, such as a loan split into smaller parts, these may mature at different times, leaving you with a potential fixed rate break cost. Will you be losing the benefit of a lower rate on the other splits?

If you have worked with a mortgage adviser there may also be fees that you may need to pay if you cancel your loan. Generally speaking if you’re using the same mortgage adviser to move to another provider there probably will not be any cost. However if you decided to go direct or use another adviser there could be some form of payment required for the service they provided. This is due to commission they received from the provider also being subject to claw back within a 27-month period.

When you balance out the information regarding any possible costs, interest rate differential and cashback being offered, the question of whether moving banks is financially a good option should easily be answered.

Speaking to a mortgage adviser who can go through all of the numbers with you and give you guidance on whether it’s worth moving financially would be a great place to start.

Generally if they were the adviser who initially worked with you to settle the loan, they will get in touch with you six weeks before the loan is due to mature and will have started the conversation with you already.

So, in summary, it is worth reviewing your existing home loan at the time of refixing.