Rate rises may prompt mortgage holders to refinance in 2010
RISING interest rates in 2010 are likely to force some borrowers to refinance, non-bank lender Resi Mortgage Corporation says.
RISING interest rates in 2010 are likely to force some mortgage holders to refinance, non-bank lender Resi Mortgage Corporation says.
Resi's Head of Consumer Advocacy, Lisa Montgomery, says that with three consecutive rate rises already announced and more predicted for 2010 borrowers may find they need to refinance to a better mortgage alternative.
"With rates now widening between loan providers and some borrowers feeling frustrated at an absence of customer empathy from their lender, now is the ideal time of year to decide whether you can work within the features of your existing mortgage to improve your cash flow," Ms Montgomery said in a statement.
"Or if you're better off cutting your losses and paying break fees if necessary, by refinancing to a more appropriate loan and lender."
She said people can save money over the long term by considering a range of simple options.
They include switching to fortnightly payments instead of monthly, which not only lessens the impact of paying one large lump sum each month but also means your loan is paid off sooner.
It also includes consolidating any lingering credit card debt which is accruing high interest of up to 20 per cent into your mortgage, allowing you to concentrate on paying off one lower interest loan.
She said another option was directing any savings from other accounts onto a mortgage, thus lowering the principal.
"If you then look at these changes and still find they won't materially improve your finances or that your circumstances have changed too much for them to make any significant impact - that's when it may be time start looking around for a more customised solution in the form of a new loan with a better rate, more appropriate loan features or more genuine customer support."
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