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Date Published : Wednesday, February 20, 2008
In the past, many Australians have been stuck with their mortgage lender or financial institution when they take out loans. High entry and exit fees often priced many consumers out of switching loans companies.
However, the Rudd government is planning to change that and end years of heartache for many homeowners by scrapping the fees that have blocked the paths of many.
In that case, many Australians are likely to take advantage of the situation and switch loan providers. But, what are the advantages of switching loans and what should consumers look out for?
Looking for a better rate of interest or simply better service at another bank could be the reason to switch loans. However, not doing your homework before switching could make the financial situation worse in the long run.
Lisa Montgomery, from Resi Mortgage Corporation, told the Australian: "For anybody who's looking to change their loan, you still need to take note of all the fees to get out of your existing loan, all the fees to get into your new one and ask what value is (switching) going to bring to your overall financial situation.''
Under the new proposals, banks and lenders will have to give more impartial advice regarding loans, with a number already offering such a service.
Advice from ANZ on its website states: "Your situation may have changed since you first got your loan and you may now want to take advantage of other features on your loan. For example, if you now have savings, you could benefit from a mortgage offset account."
Switching loans could be the major financial talking point of 2008.
Compare loan deals.
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