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  • Costs of switching banks

    Hi Guys

    One of our properties is up for refixing shortly. We are contemplating refinancing it and switching it away from our current bank probably to Kiwi bank or Bank Direct to get somewhat lower rates.

    Since we will wait until it is floating there will be no early repayment fees at least as I understand it, however I'm curious what other's experience with the process of switching banks has been, how much has it cost, what are the other costs and so on.

    So if anyone has any experience, positive or negative to share it would be much appreciated.

    Cheers
    David
    New to property investing? See: Best PropertyTalk Threads for New and Old Investors And/Or:Propertytalk Wiki


  • #2
    Who is the current lender?

    Are you not happy with their service, or you just see other lenders offering better rates?

    Surely if you talked to them, and explain your intentions to move, they could sharpen the rate for you?

    If you're only talking about a half percent or so difference, and you have substantial borrowings with them, then I'm sure they can offer a reduced rate.
    They could offer another .2% off their lowest rate for your valued custom.(there's .7% less for a start)

    Comment


    • #3
      Hi Glen, the current lender is National. We are not dissatisfied but not satisfied either. We do have an ongoing gripe with them charging $12.50 a month for the pleasure of having a revolving credit account with them, whereas Kiwi bank (and others) offer such a facility free of monthly charge, but is really a minor matter. It would also be interesting from the perspective of spreading our lending around.

      In the end though we probably won't switch but instead as you suggest use the notion of switching tactically.

      However I am still generally interested in knowing the costs and hassles etc since in the future it may still be a useful option to pursue.

      Cheers
      David
      New to property investing? See: Best PropertyTalk Threads for New and Old Investors And/Or:Propertytalk Wiki

      Comment


      • #4
        Originally posted by Monid View Post
        Hi Glen, the current lender is National. We are not dissatisfied but not satisfied either. We do have an ongoing gripe with them charging $12.50 a month for the pleasure of having a revolving credit account with them, whereas Kiwi bank (and others) offer such a facility free of monthly charge, but is really a minor matter. It would also be interesting from the perspective of spreading our lending around.

        In the end though we probably won't switch but instead as you suggest use the notion of switching tactically.

        However I am still generally interested in knowing the costs and hassles etc since in the future it may still be a useful option to pursue.

        Cheers
        David
        Have you tried New Zealand Home Loans? Awesome service with low or no fees!
        $250 application fee at the start and thats it!

        Instead of leaving National Bank then, I would enquire as to how much you can redraw, and shuffle things round on your existing facility, and take that money as a deposit for another property to another lender.

        That way you can keep your further properties completely seperate from your initial lending.

        So in answer to your question, then I guess I personally wouldn't change banks, but would use the existing bank/lender to its maximum use, and then take what I could to somewhere else and 'start' again!....and keep doing it!

        (I actually find that traditional banks are way too conservative, and non-bank lending is way more flexible,.....and usually cheaper!)

        Comment


        • #5
          Bank fees for discharging a loan are usually around $300 to $400 dollars.

          John

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          • #6
            It also costs to get the mortgage set up with the new bank. The new bank should give say $500 in legal fees but that might not cover all costs.

            I changed banks when I was in london and due to it being held by a company, ended up paying a lot to get it done since I couldn't do it all in person.

            Definately do it when in NZ or just ask the bank for a discounted rate or no fees.

            Comment


            • #7
              I think bankdirect can handle all the switching paperwork also. I remember reading they will send out docs in courier etc..

              Comment


              • #8
                I am just re-financing with Kiwibank as we speak. I have done it once before several years ago with Kiwibank also. If you are re-financing with an LVR 80% or less and have a reasonably recent GV then the entire process is free.

                I have just done that with a property now because the current lender (GE Money) has a higher interest rate and also the same issues with revolving credit that you mention.

                In my particular case I obtained a new registered valuation and am re-financing and topping up to 80%, and its all free apart from the cost of the valuation.

                Comment


                • #9
                  Free as in no cost or free as in they pay the costs?

                  Comment


                  • #10
                    Free as in they use their own solicitor for the refinance legals and don't charge you.

                    Comment


                    • #11
                      Thanks guys for the input

                      Cheers
                      David
                      New to property investing? See: Best PropertyTalk Threads for New and Old Investors And/Or:Propertytalk Wiki

                      Comment


                      • #12
                        Have you tried New Zealand Home Loans? Awesome service with low or no fees!
                        Absolutely agree! No monthly fees and no electronic charges.
                        Lisa

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