Discharge and refinance cost?

Discussion in 'Property Finance' started by unloadmymind, 14th Dec, 2014.

  1. unloadmymind

    unloadmymind Member

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    I'm trying to figure out the threshold amount of interest/fees savings in order to make it worthwhile to move lenders (refi).

    Say I have a $250k loan PPOR no LMI 80% LVR (plain vanilla type of loan), and want to refinance, how much interest and fee savings would it take for it to be worthwhile considering the cost of discharging a loan from old lender and applying for a refi to another lender?

    I was thinking:
    Discharge and legal fees to old lender $500
    Valuation application and legal fees payable to new lender $500

    So the new loan should save me more than $1000 to make this refi sensible?
    Are there other fees I'm missing?

    Assuming other things being equal e.g. quality of service or whatever.
     
  2. Marty McDonald

    Marty McDonald Mortgage Broker Syd

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    That's about right. I usually work off needs to be at least $1k pa saving to even consider a a straight refinance (where no new funds are needed).

    If your at 80% your existing lender may also sharpen their rate.
     
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  3. Jamie M

    Jamie M Mortgage Broker - Oz Wide

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    Yep - generally budget around $1k for a refi. I agree with Marty though - if it's a refi for a cheaper product than ask your current lender to match before jumping ship.

    Cheers

    Jamie
     
  4. unloadmymind

    unloadmymind Member

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    Thanks that's what I'm thinking.

    It's hard to get lower rates from Westpac though even if you threaten to leave.
     
  5. Jamie M

    Jamie M Mortgage Broker - Oz Wide

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    Yeah - it's hard to get movement at that loan size but it's worth asking the question.

    Cheers

    Jamie
     
  6. perthguy

    perthguy Member

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    I just got loan docs through where the refi costs are $927 That is Victoria, which seems to be higher than WA. The WA loans are around $380 for the new lender. I think $1k is a good number to work on.
     
  7. Redom

    Redom Mortgage Broker

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    Yep, I like to budget $1000 in exit/entry costs for refinances.

    Cheers,
    Redom
     
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