1) A home loan is the cheapest loan you will ever get. As such don't pay it off early. Your strategy should be to (i) borrow as much as possible (ii) for as long as possible and (iii) pay it off as slowly as possible.
Be sure that you pay all other borrowings before paying down your home loan -- (since all other debt is more expensive).
2) No bank announces that the lock-in has ended and rates are going up. None informs borrowers there is a way to avoid the automatic rate increases -- and lower payments to the bank.
3) When you move your home loan to another bank, it is called "refinancing". When you keep your loan at the same bank, it is called "re-pricing".
After the lock-in has ended, do one or the other -- refinance or re-price. Continuing with loan after the lock-in period is almost always more expensive than refinancing or re-pricing.
4) It is often worthwhile to re-price with the same bank to avoid legal and other fixed costs from switching.
Tell your bank you intend to re-price. You may be surprised by the bank's attitude. It will not be offended. It will become more friendly and helpful since they don't want to lose your business. To keep you as a customer, the bank will come up with an attractive re-pricing package.
5) You will get the lowest rates by bargaining. Two good ways to increase your bargaining power are: (i) Don't refinance alone. Do it with a group of friends. (ii) Shop around. Show banks the lowest rate you find -- and then ask if they can improve on it.
6) A common sales pitch is “free partial repayment” within the lock-in period. It is not as special as it sounds since you cannot finance the partial repayment with a bank loan. You must make the payment with cash or otherwise.
7) Nearly all banks are willing to go lower than their published rates. Most acknowledge that their quoted rates are “subject to negotiation” and “the relationship manager may be able to lower rates further”.
8) Be especially wary of one-time offers. A marketing gimmick is for banks to tell customers about “special offers that have not yet been made public”. The deals are supposedly reserved for "special customers like you".
While it is correct that the offers have not been advertised, they are often complex and usually more expensive than a simple pegged-rate home-loan.
Be sure that you pay all other borrowings before paying down your home loan -- (since all other debt is more expensive).
2) No bank announces that the lock-in has ended and rates are going up. None informs borrowers there is a way to avoid the automatic rate increases -- and lower payments to the bank.
3) When you move your home loan to another bank, it is called "refinancing". When you keep your loan at the same bank, it is called "re-pricing".
After the lock-in has ended, do one or the other -- refinance or re-price. Continuing with loan after the lock-in period is almost always more expensive than refinancing or re-pricing.
4) It is often worthwhile to re-price with the same bank to avoid legal and other fixed costs from switching.
Tell your bank you intend to re-price. You may be surprised by the bank's attitude. It will not be offended. It will become more friendly and helpful since they don't want to lose your business. To keep you as a customer, the bank will come up with an attractive re-pricing package.
5) You will get the lowest rates by bargaining. Two good ways to increase your bargaining power are: (i) Don't refinance alone. Do it with a group of friends. (ii) Shop around. Show banks the lowest rate you find -- and then ask if they can improve on it.
6) A common sales pitch is “free partial repayment” within the lock-in period. It is not as special as it sounds since you cannot finance the partial repayment with a bank loan. You must make the payment with cash or otherwise.
7) Nearly all banks are willing to go lower than their published rates. Most acknowledge that their quoted rates are “subject to negotiation” and “the relationship manager may be able to lower rates further”.
8) Be especially wary of one-time offers. A marketing gimmick is for banks to tell customers about “special offers that have not yet been made public”. The deals are supposedly reserved for "special customers like you".
While it is correct that the offers have not been advertised, they are often complex and usually more expensive than a simple pegged-rate home-loan.
