A common scenario we see week in week out.
Simon and Jane have been long standing customers of major bank X. They’ve banked with X since they were teenagers (as their parents did before them).
They have had a ‘set and forget’ attitude towards the mortgage but a friend of theirs recently used our services here at Envisage and suggested they have a chat.
It’s readily apparent after speaking to them that the rate they are paying with Bank X is quite a few ‘bps’ (basis points) higher than the rate we could source them if we were to arrange a new loan with X. It would appear that Bank X has not been ‘willing’ to share its latest deals with these loyal clients!
What are their options? Ask Envisage to shop around the market for the ‘best’ price, noting that it’s not just about price; or, allow us to approach X to broker a better deal.
A common concern is that with savings accounts, credit cards and possibly even a business loan all with Bank X, it’s too hard to change…..rubbish. For one, if you really want, there is no reason why your savings and credit cards can’t remain with X.
How much can be saved? Let’s assume there’s 25 years left on their 30 yr mortgage of $500,000 (outstanding). Simon and Jane are presently paying 4.84% variable with 100% offset, redraw and an annual fee of $299.
A desktop valuation (free to Envisage Clients) conducted through RP Data suggests that the property is worth about $860,000 – a pleasant surprise to my clients. This tells us the ‘LVR’ or loan to value ratio is 58.1%.
At a sub 80% LVR, all the lenders are keen to know you!
Going through our panel of lenders (36+ and growing), the team at Envisage quickly identify a lender who’s keen to grow their market share and is presently offering a fantastic promotional variable rate of 3.99%. How much would they save?
Let’s presume, S & J are presently making fortnightly repayments (principal & interest) of circa $1216.
At a 3.99% rate, that would fall to $1100 (fortnightly over 30 years). A saving of $3016 per YEAR – each and every year!
Though we would recommend, all other things being equal, that the Clients maintain repayments at their current rate – they would repay the loan off in 25 years.
Simon & Jane agree to the refinance – and they pay us nothing. They not only saved money, but also time & energy.