Rising interest rates have put a dampener on some home owners servicing mortgages. But it also means it’s a good time to look at the type of loan you have and whether it might pay to switch. Banks offer different rates at different points in time, based on the supply and demand of funds at their disposal. However, opting for the cheapest rates does not work for every home owner as individual needs vary. There are two broad categories of home loan options to consider – fixed rate and floating packages. Here are three tips to note before you switch home loans. 1) Find out if the savings outweigh the costs of refinancing; 2) If your package comes with a lock-in period – usually two to three years – you are subject to a penalty if you withdraw your loan; 3) It does not make sense to refinance if you plan to sell within the next 12 months. This is because you have to incur redemption fees, which include refunding legal subsidies or cashbacks to the banks.... Continue Reading