Refinancing your home loan to take advantage of a lower interest rate might save you money. Before you switch, make sure the benefits outweigh the costs.
If you're struggling with your home loan repayments, see problems paying your mortgage for help.
Before you decide to switch
If you're thinking about switching home loans, you're probably focused on getting a better interest rate. But there are other things to consider before switching.
Ask your current lender for a better deal
Tell your current lender you are planning to switch to a cheaper loan offered by a different lender. To keep your business, your lender may reduce the interest rate on your current loan.
If you have at least 20% equity in your home, you'll have more to bargain with. Having a good credit score will also help with negotiations.
Compare any loan they offer you with the other loans you're considering. See choosing a home loan for tips on what to look for.
Negotiate the length of the new loan
Some lenders will only refinance with a new 25 or 30 year loan term. You could end up with a longer loan term than the years left to pay off your current mortgage.
The longer you have a loan, the more you'll pay in interest. If you do decide to switch, negotiate a loan with a similar length to your current one.
Weigh up the cost of lender's mortgage insurance
If you have less than 20% equity in your home, you might have to pay lender's mortgage insurance (LMI). This can increase the cost of switching and outweigh the savings you'll get from a lower interest rate.
If you decide to switch, ask for a refund of some of the LMI from your current loan.
Compare the costs of switching your mortgage
Get at least two different quotes on home loans for your situation.
Check the average interest rate
'+ '
Choose your loan and repayment types to see the average interest rate for new home loans in ' + rateData.lastUpdated + ' (Reserve Bank of Australia). Interest rates are rising, so the average rate may now be higher.
' + '
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required field
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'+CALC_NAME+' details
'+ '
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Your repayments will be:
'+ '
Total repayments
'+ '
'; // How much will my repayments be? Explore html = html + '
'+ '
'+ '
'+ '
Interest rates change by+' + formatNumber(START_BUFFER_RATE, 0, 2, true) + '%
'+ '
'+ '
New interest rate
'+ '
Your new repayments
'+ '
Your repayments will cost an extra
'+ '
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'; $("#repayments").html(html); // How much can I borrow? html = '
How much can I borrow?
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required field
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'+CALC_NAME+' details
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You can borrow:
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Total repayments
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'; // How much can I borrow? Explore html = html + '
'+ '
'+ '
'+ '
Interest rates change by+' + formatNumber(START_BUFFER_RATE, 0, 2, true) + '%
'+ '
'+ '
New interest rate
'+ '
Your new borrowing amount
'+ '
You can borrow
'+ '
'+ '
'+ '
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'+ '
'; $("#borrow").html(html); // How can I repay my loan sooner? html = '
How can I repay my loan sooner?
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required field
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Current '+CALC_NAME.toLowerCase()+'
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Time to repay:
'+ '
Total repayments
'+ '
'; // How can I repay my loan sooner? Explore html = html + '
'+ '
'+ '
'+ '
Interest rates change by+' + formatNumber(START_BUFFER_RATE, 0, 2, true) + '%
'+ '
'+ '
New interest rate
'+ '
Your new repayment time
'+ '
You can repay
'+ '
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'+ '
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'+ '
'; $("#howlong").html(html); // add the frequency options to the select boxes html = '
'+ '
'+ '
'; $('#calculator-container .frequency-select').html(html); $('.tab > div').hide(); } //global vars var borrowChart; var repaymentsChart; var howlongChart; repayExplore = true; borrowExplore = true; function CalculateRepayments(lastEl){ if ( $('#repayments input:visible.empty').length > 0 && $('#repayments .result').css("display") == "none" ) { return false; } var labelCollection = []; var interestCollection = []; var principalCollection = []; //actual var rate = parseFloat( $("#repay-rate1").val().replace(/[^0-9\.]/g,'') ); //interest rate (entered p.a. so we need to convert per period) var per = parseInt( $("#repay-freq1").val() ); //number of periods (eg. 12 = 1 year) var years = parseInt( $("#repay-length1").val().replace(/[^0-9]/g,'') ); if( years < 1 ) { years=1; } if( years > 30 && CALC_NAME === 'Mortgage') { years = 30 } if( years > 15 && CALC_NAME === 'Personal loan') { years = 15; } var nper = years * per; //total number of payment periods (eg. 20 years * 12 months = 240) var pv = parseFloat( $("#repay-amount1").val().replace(/[^0-9\.]/g,'') ); //payment made each period (enter as negative) var fee = parseFloat( $("#repay-fee1").val().replace(/[^0-9\.]/g,'') ); var feeFreq = parseInt( $("#repay-feefreq1").val() ); var fv = 0; //future value var fees = parseFloat( (fee*feeFreq)/(per) ); // fee per repayment period var pmt = parseFloat( PMT((rate/100)/per, years*per, -pv, fv, 0) ) + fees; //payment made each period var result = pmt * per * years; var principal = pv; var interest = result - principal; labelCollection.push('' + CALC_NAME + ' details
Repay $'+formatNumber(pmt, 0, 0, true) + '' + freqString(per) + '
'+rate+'% for '+years+' years'); $("#repayments .inline-result span").html( '$' + formatNumber(pmt, 0, 0, true) + '' + freqString(per) ); // blank out the what if results, if amount borrowed is zero if ( pv === 0 || isNaN(pv) || isNaN(rate) ) { labelCollection[labelCollection.length-1] = ''; principal = 0; interest = 0; } interestCollection.push(interest); principalCollection.push(principal); //explore scenario var rate1Val; var per1Val; var years1Val; var amount1Val; if ( $("#repay-picker").val() == 'interestRateChange') { // keep 'What if interest rates change' synced with the loan details var bufferVal = rate + Number(document.getElementById("repay-lbl-intRate").dataset.rate); if (bufferVal < 0) { // don't let rate go negative, reset to original buffer document.getElementById("repay-lbl-intRate").dataset.rate = START_BUFFER_RATE; document.getElementById("repay-lbl-intRate").innerHTML = '+' + formatNumber(START_BUFFER_RATE, 0, 2, true) + '%'; bufferVal = rate + Number(document.getElementById("repay-lbl-intRate").dataset.rate); } rate1Val = formatNumber(bufferVal, 0, 2, true) + '%'; amount1Val = $("#repay-amount1").val(); per1Val = $("#repay-freq1").val(); years1Val = $("#repay-length1").val(); } else { rate1Val = $("#repay-rate1-explore").val(); per1Val = $("#repay-freq1-explore").val(); years1Val = $("#repay-length1-explore").val(); amount1Val = $("#repay-amount1-explore").val(); } var bufferChange = Number(document.getElementById("repay-lbl-intRate").dataset.rate); var rate1 = parseFloat(rate1Val.replace(/[^0-9\.]/g, '')); //interest rate (entered p.a. so we need to convert per period) var per1 = parseInt(per1Val); //number of periods (eg. 12 = 1 year) var years1 = parseInt(years1Val.replace(/[^0-9]/g, '')); if (years1 < 1) { years1 = 1; } if (years1 > 30 && CALC_NAME === 'Mortgage') { years1 = 30 } if (years1 > 15 && CALC_NAME === 'Personal loan') { years1 = 15; } var nper1 = years1 * per1; //total number of payment periods (eg. 20 years * 12 months = 240) var pv1 = parseFloat(amount1Val.replace(/[^0-9\.]/g, '')); //payment made each period (enter as negative) var fees1 = parseFloat((fee * feeFreq) / (per1)); // fee per repayment period if (pv1 === 0) { fees1 = 0; } var pmt1 = parseFloat(PMT((rate1 / 100) / per1, years1 * per1, -pv1, fv, 0)) + fees1; //payment made each period var result1 = pmt1 * per1 * years1; var principal1 = pv1; var interest1 = result1 - principal1; var labelHeading = 'Alternative'; if ($("#repay-picker").val() == 'interestRateChange') { labelHeading = 'If interest rate goes ' + (bufferChange < 0 ? 'down' : 'up') + ' by ' + formatNumber(bufferChange, 0, 2, true) + '%'; } else if ($("#repay-picker").val() == 'alternative') { labelHeading = 'Alternative'; } labelCollection.push('' + labelHeading + '
Repay $' + formatNumber(pmt1, 0, 0, true) + '' + freqString(per1) + '
' + rate1 + '% for ' + years1 + ' years'); var newpmt = pmt; if (per != per1) { // make frequency match for comparison newpmt = parseFloat( PMT((rate/100)/per1, years*per1, -pv, fv, 0) ) + fees; //payment made each period } var diff = newpmt - pmt1; // don't show alternative graph if no value entered or is 0 if (pv1 === 0 || isNaN(pv1) || isNaN(rate1)) { labelCollection[labelCollection.length - 1] = ''; principal1 = 10; // set to 10 so it displays on safari interest1 = 0; } interestCollection.push(interest1); principalCollection.push(principal1); var principalData = []; var interestData = []; var interestColours = ['#A6BEFC', '#e1f8fe' ]; var principalColours = ['#0146F5' ,'#210c4b' ]; for (var i=0; i < interestCollection.length; i++) { interestData.push({y:interestCollection[i], color:interestColours[i]}) } for (var i=0; i < principalCollection.length; i++) { principalData.push({y:principalCollection[i], color:principalColours[i]}) } if (bufferChange < 0) { document.getElementById("repay-lbl-resultDesc").innerHTML = 'Your repayments will reduce by'; } else { document.getElementById("repay-lbl-resultDesc").innerHTML = 'Your repayments will cost an extra'; } document.getElementById("repay-lbl-newIntRate").innerHTML = '' + formatNumber(rate1, 0, 2, true) + '%'; document.getElementById("repay-lbl-newRepayment").innerHTML = '' + '$' + formatNumber(pmt1, 0, 0, true) + ' ' + freqString(per1); document.getElementById("repay-lbl-intRateDiff").innerHTML = '' + '$' + formatNumber(diff, 0, 0, true) + ' ' + freqString(per1); //chart if ( repaymentsChart === undefined ) { //we need to create the chart on first use var html = '
'; $("#repayments .chart").html(html); repaymentsChart = new Highcharts.Chart({ chart: { renderTo: 'repayments-chart1', type: 'column', marginBottom: 90, marginTop: 30}, colors: [ '#ACE8FA', '#0047F5' ], credits: { enabled: false }, title: { text: null }, xAxis: { categories: labelCollection, labels: { y:30, style: { fontFamily: '\'Montserrat\', sans-serif', fontSize: '15px', color: '#333' } } }, yAxis: { min: 0, title: { text: null }, stackLabels: { enabled: true, style: { fontWeight: 'bold', fontFamily: '\'Montserrat\', sans-serif', fontSize: '15px', color: '#333', align: 'center', textOutline: "0px", }, formatter: function() { if (this.total > 10 || this.x == 0) { return '$' + formatNumber(this.total, 0, 0, true); } else { return 'Add comparison below'; } } }, labels: { style: { fontFamily: '\'Montserrat\', sans-serif', color: '#333' } } }, legend: { backgroundColor: '#FFFFFF', reversed: true, enabled: false }, tooltip: { formatter: function() { return this.series.name +': $' + formatNumber(this.y, 0, 0, true); } }, plotOptions: { series: { stacking: 'normal' } }, series: [{ name: 'Interest (including fees)', data: interestData }, { name: 'Principal', data: principalData }] }); } else { repaymentsChart.xAxis[0].setCategories(labelCollection); for (var i=0; i < interestCollection.length; i++) { repaymentsChart.series[0].data[i].update(interestCollection[i]); } for (var i=0; i < principalCollection.length; i++) { repaymentsChart.series[1].data[i].update(principalCollection[i]); } } $("#repayments .result").css('display', 'flex'); if ( CALC_NAME === 'Personal loan' ){ dataLayer.push({ event: 'calculatorCompleted', personalLoanData: serializeData(document.getElementById('calculator-container'), 'A', lastEl) }); } else{ dataLayer.push({ event: 'calculatorCompleted', mortgageCalcData: serializeData(document.getElementById('calculator-container'), 'A', lastEl) }); } } function CalculateBorrowAmount(lastEl){ if ( $('#borrow input:visible.empty').length > 0 && $('#borrow .result').css("display") == "none" ) { return false; } var labelCollection = []; var interestCollection = []; var principalCollection = []; var type = 0; // used for PV function //actual var rate = parseFloat( $("#rate1").val().replace(/[^0-9\.]/g,'') ); //interest rate (entered p.a. so we need to convert per period) var per = parseInt( $("#freq1").val() ); //number of periods (eg. 12 = 1 year) var years = parseInt( $("#length1").val().replace(/[^0-9]/g,'') ); if( years < 1 ) { years=1; } if( years > 30 && CALC_NAME === 'Mortgage') { years = 30 } if( years > 15 && CALC_NAME === 'Personal loan') { years = 15; } var nper = years * per; //total number of payment periods (eg. 20 years * 12 months = 240) var pmt = parseFloat( $("#payment1").val().replace(/[^0-9\.]/g,'') ); //payment made each period var fee = parseFloat( $("#fee1").val().replace(/[^0-9\.]/g,'') ); var feeFreq = parseInt( $("#feefreq1").val() ); var fv = 0; //future value var fees = (fee * feeFreq * years ); var interest = (pmt * per * years ) + fees; //interest including fees var label; //calculate actual var principal = PV((rate/100)/per, nper, -pmt+((fee*feeFreq)/per), fv, type); interest = interest - principal; if (principal <= 0) { interest = 0; principal = 0; $("#borrow .inline-result span:first").html( 'N/A' ); //label = 'Repayment won\'t cover interest and fees'; labelCollection.push('Repayment won\'t cover interest and fees'); } else { $("#borrow .inline-result span:first").html( '$' + formatNumber(principal, 0, 0, true) + '' ); //label = '' + CALC_NAME + ' details
Borrow $'+formatNumber(principal, 0, 0, true)+'
'+rate+'% for '+years+' years'; labelCollection.push('' + CALC_NAME + ' details
Borrow $'+formatNumber(principal, 0, 0, true) + '
'+rate+'% for '+years+' years'); } // blank out the what if results, if amount borrowed is zero if ( pmt === 0 || isNaN(pmt) || isNaN(rate) ) { labelCollection[labelCollection.length-1] = ''; principal = 0; interest = 0; } interestCollection.push(interest); principalCollection.push(principal); //explore scenario var rate1Val; var per1Val; var years1Val; var payment1Val; if ( $("#howmuch-picker").val() == 'interestRateChange') { // keep 'What if interest rates change' synced with the loan details var bufferVal = rate + Number(document.getElementById("howmuch-lbl-intRate").dataset.rate); if (bufferVal < 0) { // don't let rate go negative, reset to original buffer document.getElementById("howmuch-lbl-intRate").dataset.rate = START_BUFFER_RATE; document.getElementById("howmuch-lbl-intRate").innerHTML = '+' + formatNumber(START_BUFFER_RATE, 0, 2, true) + '%'; bufferVal = rate + Number(document.getElementById("howmuch-lbl-intRate").dataset.rate); } rate1Val = formatNumber(bufferVal, 0, 2, true) + '%'; payment1Val = $("#payment1").val(); per1Val = $("#freq1").val(); years1Val = $("#length1").val(); } else { rate1Val = $("#rate1-explore").val(); per1Val = $("#freq1-explore").val(); years1Val = $("#length1-explore").val(); payment1Val = $("#payment1-explore").val(); } var bufferChange = Number(document.getElementById("howmuch-lbl-intRate").dataset.rate); /* if ( borrowChart === undefined && CALC_NAME === 'Mortgage' ) { // on first calculation prefill scenario to show the buffer interest rate, all other fields copied over var bufferVal = rate + START_BUFFER_RATE; $("#rate1-explore").val(formatNumber(bufferVal, 0, 2, true) + '%'); $("#payment1-explore").val($("#payment1").val()); $("#freq1-explore").val($("#freq1").val()); $("#length1-explore").val($("#length1").val()); document.getElementById("rate1-explore").classList.remove("empty"); document.getElementById("payment1-explore").classList.remove("empty"); } */ var rate1 = parseFloat( rate1Val.replace(/[^0-9\.]/g,'') ); //interest rate (entered p.a. so we need to convert per period) var per1 = parseInt( per1Val ); //number of periods (eg. 12 = 1 year) var years1 = parseInt( years1Val.replace(/[^0-9]/g,'') ); if( years1 < 1 ) { years1=1; } if( years1 > 30 && CALC_NAME === 'Mortgage') { years1 = 30 } if( years1 > 15 && CALC_NAME === 'Personal loan') { years1 = 15; } var nper1 = years1 * per1; //total number of payment periods (eg. 20 years * 12 months = 240) var pmt1 = parseFloat( payment1Val.replace(/[^0-9\.]/g,'') ); //payment made each period var interest1 = (pmt1 * per1 * years1 ) + fees; var label1; //calculate explore scenario var principal1 = PV((rate1/100)/per1, nper1, -pmt1+((fee*feeFreq)/per1), fv, type); interest1 = interest1 - principal1; var labelHeading = 'Alternative'; if ($("#howmuch-picker").val() == 'interestRateChange') { labelHeading = 'If interest rate goes ' + (bufferChange < 0 ? 'down' : 'up') + ' by ' + formatNumber(bufferChange, 0, 2, true) + '%'; } else if ($("#howmuch-picker").val() == 'alternative') { labelHeading = 'Alternative'; } if (principal1 <= 0) { interest1 = 0; principal1 = 0; labelCollection.push('Repayment won\'t cover interest and fees '); //label1 = 'Repayment won\'t cover interest and fees'; } else { labelCollection.push('' + labelHeading + '
Borrow $' + formatNumber(principal1, 0, 0, true) + '
' + rate1 + '% for ' + years1 + ' years'); //label1 = 'Alternative
Borrow $'+formatNumber(principal1, 0, 0, true)+'
'+rate1+'% for '+years1+' years'; } var diff = principal - principal1; // don't show alternative graph if no value entered or is 0 if ( pmt1 === 0 || isNaN(pmt1) || isNaN(rate1) ) { labelCollection[labelCollection.length - 1] = ''; principal1 = 0; interest1 = 0; } interestCollection.push(interest1); principalCollection.push(principal1); var principalData = []; var interestData = []; var interestColours = ['#A6BEFC', '#e1f8fe' ]; var principalColours = ['#0146F5' ,'#210c4b' ]; for (var i=0; i < interestCollection.length; i++) { interestData.push({y:interestCollection[i], color:interestColours[i]}) } for (var i=0; i < principalCollection.length; i++) { principalData.push({y:principalCollection[i], color:principalColours[i]}) } var diffHeading = 'less'; if (bufferChange < 0) { diffHeading = 'more'; } document.getElementById("howmuch-lbl-newIntRate").innerHTML = '' + formatNumber(rate1, 0, 2, true) + '%'; document.getElementById("howmuch-lbl-newBorrowing").innerHTML = '' + '$' + formatNumber(principal1, 0, 0, true) + ''; document.getElementById("repay-lbl-borrowingDiff").innerHTML = '' + '$' + formatNumber(diff, 0, 0, true) + ' ' + diffHeading; //chart if ( borrowChart === undefined ) { //we need to create the chart on first use var html = '
'; $("#borrow .chart").html(html); borrowChart = new Highcharts.Chart({ chart: { renderTo: 'chart1', type: 'column', marginBottom: 90, marginTop: 30 }, colors: [ '#ACE8FA', '#0047F5' ], credits: { enabled: false }, title: { text: null }, xAxis: { categories: labelCollection, labels: { y:30, style: { fontFamily: '\'Montserrat\', sans-serif', fontSize: '15px', color: '#333' } } }, yAxis: { min: 0, title: { text: null }, stackLabels: { enabled: true, style: { fontWeight: 'bold', fontFamily: '\'Montserrat\', sans-serif', fontSize: '15px', color: '#333', align: 'center', textOutline: "0px", }, formatter: function() { // don't display 'Add comparison below' if they've entered an invalid comparison var invalidComparison = false; var xValue = this.x, xAxis = this.axis.chart.xAxis[0]; if(xAxis.categories[xValue] == 'Repayment won\'t cover interest and fees'){ invalidComparison = true; } if ((this.total > 10 || this.x == 0) || this.x == 1 && invalidComparison == true) { return '$' + formatNumber(this.total, 0, 0, true); } else { return 'Add comparison below'; } } }, labels: { style: { fontFamily: '\'Montserrat\', sans-serif', color: '#333' } } }, legend: { backgroundColor: '#FFFFFF', reversed: true, enabled: false }, tooltip: { formatter: function() { return this.series.name +': $' + formatNumber(this.y, 0, 0, true); } }, plotOptions: { series: { stacking: 'normal'} }, series: [{ name: 'Interest (including fees)', data: interestData }, { name: 'Principal', data: principalData }] }); } else { borrowChart.xAxis[0].setCategories(labelCollection); for (var i=0; i < interestCollection.length; i++) { borrowChart.series[0].data[i].update(interestCollection[i]); } for (var i=0; i < principalCollection.length; i++) { borrowChart.series[1].data[i].update(principalCollection[i]); } } $("#borrow .result").css('display', 'flex'); if ( CALC_NAME === 'Personal loan' ){ dataLayer.push({ event: 'calculatorCompleted', personalLoanData: serializeData(document.getElementById('calculator-container'), 'B', lastEl) }); } else{ dataLayer.push({ event: 'calculatorCompleted', mortgageCalcData: serializeData(document.getElementById('calculator-container'), 'B', lastEl) }); } } function CalculateHowlong(lastEl){ if ( $('#howlong input:visible.empty').length > 0 && $('#howlong .result').css("display") == "none" ) { return false; } var labelCollection = []; var interestCollection = []; var principalCollection = []; var type = 0; // used for NPER function //actual var rate = parseFloat( $("#howlong-rate1").val().replace(/[^0-9\.]/g,'') ); //interest rate (entered p.a. so we need to convert per period) var per = parseInt( $("#howlong-freq1").val() ); //number of periods (eg. 12 = 1 year) var pv = parseFloat( $("#howlong-amount1").val().replace(/[^0-9\.]/g,'') ); var fee = parseFloat( $("#howlong-fee1").val().replace(/[^0-9\.]/g,'') ); var feeFreq = parseInt( $("#howlong-feefreq1").val() ); var fv = 0; //future value var pmt = parseFloat( $("#howlong-payment1").val().replace(/[^0-9\.]/g,'') ); //payment made each period var nper = NPER((rate/100)/per, -pmt + ((fee*feeFreq)/per), pv, fv, type); //fee is being matched to period of repayment, this is not 100% accurate, but result should be very close var principal = pv; var totalRepayments = pmt * nper; var interest = totalRepayments - principal; var label = ''; var labelYears = nper / per; var labelMonths = Math.ceil( (labelYears % 1)* 12 ); labelYears = parseInt(labelYears); if ( labelMonths === 12 ) { labelMonths = 0; labelYears = labelYears + 1; } if ( labelYears > 0 ) { label = labelYears + (labelYears == 1 ? ' year ' : ' years '); } if ( labelMonths > 0 ) { label = label + labelMonths + (labelMonths == 1 ? ' month' : ' months'); } var totalMonths = (labelYears * 12) + labelMonths; $("#howlong .inline-result span").html( '' + label + '' ); if ( label.length < 1 ) { label = 'Repayment won\'t cover interest and fees'; interest = 0; principal = 0; $("#howlong .inline-result span").html( 'N/A' ); labelCollection.push('Repayment won\'t cover interest and fees'); } else { //label = '' + CALC_NAME + ' details
' + label + '
$'+formatNumber(pmt, 0, 0, true) + freqString(per) + ' at ' + rate+'%'; labelCollection.push('' + CALC_NAME + ' details
' + label + '
$'+formatNumber(pmt, 0, 0, true) + freqString(per) + ' at ' + rate+'%'); } // blank out the what if results, if amount borrowed is zero if ( pmt === 0 || isNaN(pmt) || isNaN(rate) || pv === 0 || isNaN(pv) ) { label = ''; principal = 0; interest = 0; $("#howlong .inline-result span").text( "" ); } interestCollection.push(interest); principalCollection.push(principal); //explore scenario var rate1Val; var per1Val; var years1Val; var payment1Val; if ( $("#howlong-picker").val() == 'interestRateChange') { // keep 'What if interest rates change' synced with the loan details var bufferVal = rate + Number(document.getElementById("howlong-lbl-intRate").dataset.rate); if (bufferVal < 0) { // don't let rate go negative, reset to original buffer document.getElementById("howlong-lbl-intRate").dataset.rate = START_BUFFER_RATE; document.getElementById("howlong-lbl-intRate").innerHTML = '+' + formatNumber(START_BUFFER_RATE, 0, 2, true) + '%'; bufferVal = rate + Number(document.getElementById("howlong-lbl-intRate").dataset.rate); } rate1Val = formatNumber(bufferVal, 0, 2, true) + '%'; payment1Val = $("#howlong-payment1").val(); per1Val = $("#howlong-freq1").val(); } else { rate1Val = $("#howlong-rate1-explore").val(); payment1Val = $("#howlong-payment1-explore").val(); per1Val = $("#howlong-freq1-explore").val(); } var bufferChange = Number(document.getElementById("howlong-lbl-intRate").dataset.rate); var rate1 = parseFloat( rate1Val.replace(/[^0-9\.]/g,'') ); //interest rate (entered p.a. so we need to convert per period) var per1 = parseInt( per1Val ); //number of periods (eg. 12 = 1 year) var pv1 = pv; // parseFloat( $("#howlong-amount1-explore").val().replace(/[^0-9\.]/g,'') ); var pmt1 = parseFloat( payment1Val.replace(/[^0-9\.]/g,'') ); //payment made each period var nper1 = NPER((rate1/100)/per1, -pmt1 + ((fee*feeFreq)/per1), pv1, fv, type); //fee is being matched to period of repayment, this is not 100% accurate, but result should be very close var principal1 = pv1; var totalRepayments1 = pmt1 * nper1; var interest1 = totalRepayments1 - principal1; var label1 = ''; var labelYears1 = nper1 / per1; var labelMonths1 = Math.ceil( (labelYears1 % 1)* 12 ); labelYears1 = parseInt(labelYears1); if ( labelMonths1 === 12 ) { labelMonths1 = 0; labelYears1 = labelYears1 + 1; } if ( labelYears1 > 0 ) { label1= labelYears1 + (labelYears1 == 1 ? ' year ' : ' years '); } if ( labelMonths1 > 0 ) { label1 = label1 + labelMonths1 + (labelMonths1 == 1 ? ' month' : ' months'); } var totalMonths1 = (labelYears1 * 12) + labelMonths1; var labelHeading = 'Alternative'; if ($("#howlong-picker").val() == 'interestRateChange') { labelHeading = 'If interest rate goes ' + (bufferChange < 0 ? 'down' : 'up') + ' by ' + formatNumber(bufferChange, 0, 2, true) + '%'; } else if ($("#howlong-picker").val() == 'alternative') { labelHeading = 'Alternative'; } if ( label1.length < 1 ) { //label1 = 'Repayment won\'t cover interest and fees'; interest1 = 0; principal1 = 0; labelCollection.push('Repayment won\'t cover interest and fees'); } else{ //label1 = 'Alternative
' + label1 + '
$'+formatNumber(pmt1, 0, 0, true) + freqString(per1) + ' at ' + rate1+'%'; labelCollection.push('' + labelHeading + '
' + label1 + '
$'+formatNumber(pmt1, 0, 0, true) + freqString(per1) + ' at ' + rate1+'%'); } var diff = ''; if (bufferChange < 0) { diff = (totalMonths - totalMonths1); } else { diff = totalMonths1 - totalMonths; } diff = diff + (Number(diff) == 1 ? ' month' : ' months'); // blank out the what if results, if hidden, or no what if repayment supplied if ( pmt1 === 0 || isNaN(pmt1) ) { label1 = ''; principal1 = 0; interest1 = 0; labelCollection[labelCollection.length - 1] = ''; } interestCollection.push(interest1); principalCollection.push(principal1); var principalData = []; var interestData = []; var interestColours = ['#A6BEFC', '#e1f8fe' ]; var principalColours = ['#0146F5' ,'#210c4b' ]; for (var i=0; i < interestCollection.length; i++) { interestData.push({y:interestCollection[i], color:interestColours[i]}) } for (var i=0; i < principalCollection.length; i++) { principalData.push({y:principalCollection[i], color:principalColours[i]}) } var diffHeading = 'later'; if (bufferChange < 0) { diffHeading = 'sooner'; } document.getElementById("howlong-lbl-newIntRate").innerHTML = '' + formatNumber(rate1, 0, 2, true) + '%'; document.getElementById("howlong-lbl-newTime").innerHTML = '' + (label1.length < 1 ? 'N/A' : label1) + ' '; document.getElementById("howlong-lbl-timeDiff").innerHTML = '' + (label1.length < 1 ? 'N/A' : diff) + ' ' + (label1.length < 1 ? '' : diffHeading); //chart if ( howlongChart === undefined ) { //we need to create the chart on first use var html = '
'; $("#howlong .chart").html(html); howlongChart = new Highcharts.Chart({ chart: { renderTo: 'howlong-chart1', type: 'column', marginBottom: 90, marginTop: 30 }, colors: [ '#ACE8FA', '#0047F5' ], credits: { enabled: false }, title: { text: null }, xAxis: { categories: labelCollection, labels: { y:30, style: { fontFamily: '\'Montserrat\', sans-serif', fontSize: '15px', color: '#333' } } }, yAxis: { min: 0, title: { text: null }, stackLabels: { enabled: true, style: { fontWeight: 'bold', fontFamily: '\'Montserrat\', sans-serif', fontSize: '15px', color: '#333', align: 'center', textOutline: "0px", }, formatter: function() { // don't display 'Add comparison below' if they've entered an invalid comparison var invalidComparison = false; var xValue = this.x, xAxis = this.axis.chart.xAxis[0]; if(xAxis.categories[xValue] == 'Repayment won\'t cover interest and fees'){ invalidComparison = true; } if ((this.total > 10 || this.x == 0) || this.x == 1 && invalidComparison == true) { return '$' + formatNumber(this.total, 0, 0, true); } else { return 'Add comparison below'; } } }, labels: { style: { fontFamily: '\'Montserrat\', sans-serif', color: '#333' } } }, legend: { backgroundColor: '#FFFFFF', reversed: true, enabled: false }, tooltip: { formatter: function() { return this.series.name +': $' + formatNumber(this.y, 0, 0, true); } }, plotOptions: { series: { stacking: 'normal'} }, series: [{ name: 'Interest (including fees)', data: interestData }, { name: 'Principal', data: principalData }] }); } else { howlongChart.xAxis[0].setCategories(labelCollection); howlongChart.series[0].data[0].update(interest); howlongChart.series[1].data[0].update(principal); howlongChart.series[0].data[1].update(interest1); howlongChart.series[1].data[1].update(principal1); } $("#howlong .result").css('display', 'flex'); if ( CALC_NAME === 'Personal loan' ){ dataLayer.push({ event: 'calculatorCompleted', personalLoanData: serializeData(document.getElementById('calculator-container'), 'C', lastEl) }); } else{ dataLayer.push({ event: 'calculatorCompleted', mortgageCalcData: serializeData(document.getElementById('calculator-container'), 'C', lastEl) }); } } function freqString(s){ if ( s === 1 ) { s = 'year'; } if ( s === 4 ) { s = 'quarter'; } if ( s === 12 ) { s = 'month'; } if ( s === 26 ) { s = 'fortnight'; } if ( s === 52 ) { s = 'week'; } return '\xa0per\xa0' + s; } /* CALCULATOR FORMULAS */ // NPER - returns the number of periods for an investment based on an interest rate and a constant payment schedule function NPER(rate, pmt, pv, fv, type) { if (type === undefined) { type = 0; } var num = pmt * (1 + rate * type) - fv * rate; var den = (pv * rate + pmt * (1 + rate * type)); if ( rate === 0 ) { return -(fv + pv)/pmt; } else { return Math.log(num / den) / Math.log(1 + rate); } } // PMT - returns the payment amount for a loan based on an interested rate and a constant payment schedule function PMT(rate, nper, pv, fv, type) { var result; if (rate === 0) { result = (pv + fv) / nper; } else { var term = Math.pow(1 + rate, nper); if (type === 1) { result = (fv * rate / (term - 1) + pv * rate / (1 - 1 / term)) / (1 + rate); } else { result = fv * rate / (term - 1) + pv * rate / (1 - 1 / term); } } return -result; } // PV - returns the present value of an investent based on an interest rate and a constant payment schedule function PV(rate, nper, pmt, fv, type) { if (type === undefined) { type = 0; } if (rate === 0) { return - pmt * nper - fv; } else { return (((1 - Math.pow(1 + rate, nper)) / rate) * pmt * (1 +rate * type) - fv) / Math.pow(1 + rate, nper); } } function formatNumber(number, digits, decimalPlaces, withCommas) { number = number.toString(); var simpleNumber = ''; // Strips out the dollar sign and commas. for (var i = 0; i < number.length; ++i) { if ("0123456789.".indexOf(number.charAt(i)) >= 0) simpleNumber += number.charAt(i); } number = parseFloat(simpleNumber); if (isNaN(number)) number = 0; if (withCommas === null) withCommas = false; if (digits === 0) digits = 1; var integerPart = (decimalPlaces > 0 ? Math.floor(number) : Math.round(number)); var string = ""; for (var i = 0; i < digits || integerPart > 0; ++i) { // Insert a comma every three digits. if (withCommas && string.match(/^\d\d\d/)) string = "," + string; string = (integerPart % 10) + string; integerPart = Math.floor(integerPart / 10); } if (decimalPlaces > 0) { number -= Math.floor(number); number *= Math.pow(10, decimalPlaces); string += "." + formatNumber(number, decimalPlaces, 0); } return string; } function serializeData(container, calcType, lastEl){ var version = "v2"; changeCount++; var data=''; var inputs=container.querySelectorAll('input,select'); var lastElID = lastEl.id; var loopCnt = 0; var lastChanged = ''; inputs.forEach(function(input) { loopCnt++; var inputVal = input.value; if (input.classList.contains('dollars')) { inputVal = inputVal.replace(/\D+/g, ''); } inputVal = inputVal.replace('%', ''); inputVal = inputVal.replace(' years', ''); data += inputVal + '|'; if (lastElID === input.id) { lastChanged = loopCnt.toString(); } }); data += changeCount.toString() + "|" + calcType + "|" + version + "|" + lastChanged; return data; }
Compare the fees and charges
A mortgage broker or a comparison website can help you find out what's available.
Comparison websites can be useful, but they are businesses and may make money through promoted links. They may not cover all your options. See what to keep in mind when using comparison websites.
Compare these fees and charges:
Fixed rate loan |
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Discharge (or termination) fee |
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Application fee |
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Switching fee |
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Stamp duty |
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Ask the new lender to waive the application fee to get your business.
Check if you'll save by switching
Once you have a short list of potential loans and the fees involved, use the mortgage switching calculator to work out if you'll save money by changing home loans. It also shows how long it will take to recover the cost of switching.
Mortgage switching calculator
Check out how much you'll save by changing home loans.
Simon and Tiana consider refinancing
Simon and Tiana's fixed rate home loan period ends in a few months and their interest rate will increase. They decide to see what other lenders are offering.
They find two loans with a lower interest rate and the features they want.
Loan A has an application fee of $600 and Loan B has an application fee of $300. Simon and Tiana decide to pick Loan A because it has the lowest interest rate, which offsets the higher establishment fee.
By switching loans they will save $84,040 ($280 a month) over the life of their 25-year loan. They will recover the switching costs in five months.
FAQs
Can I transfer my home loan to another house? ›
The short answer to this question is 'yes' – it is generally possible. Most mortgage lenders allow you to undertake a mortgage transfer, or port your mortgage from one property to another.
How easy is it to switch mortgage lenders? ›There are pros and cons to both, depending on your circumstances. Switching mortgages with your current provider can often be done quickly, in a matter of days. That's because they already have all your personal details and financial history, so they probably won't have to run credit or affordability checks.
How do I transfer my mortgage to another bank? ›To successfully switch your mortgage lender, your old lender will have to provide you with a payout statement stating how much you owe on your mortgage, your renewal date, and any other important information about your mortgage. You'll need to present this payout statement to your new mortgage lender for processing.
What is loan switching? ›Switching lets you change the type (e.g. Fixed versus Variable interest rate) and repayments (e.g. Principal and Interest versus Interest Only payments) of your existing home loan or investment loan without having to complete a new loan application.
What happens when your home loan is transferred? ›About the home loan transfer process
In turn, when your mortgage loan is sold to a new lender, they will handle the management of your entire loan, including payments, escrow accounts, insurance, and taxes. The selling or transfer can take place immediately after closing of your home loan or years later.
Loans that are usually assumable, meaning they can be transferred in some cases, include: FHA loans. VA loans.
At what point is it too late to switch mortgage lenders? ›When is it too late to change mortgage lenders? There is no right or wrong time to change your mortgage lender, and it's really never too late to do so. However, you have to understand that refinancing is the only option if you want to change mortgage lenders after servicing begins.
Which mortgage loans allow the borrower to switch? ›What Is A Convertible ARM Loan? A convertible ARM loan is a hybrid mortgage that combines adjustable-rate mortgages (ARMs) and fixed-rate mortgages. Borrowers begin their loan term with an adjustable interest rate, but after a set period of time, they have the option to convert to a fixed rate.
What are the benefits of switching mortgage? ›Why switch your mortgage? The main reason for switching is to get a better interest rate and save money. If you're on a fixed rate mortgage you'll switch over to the lender's standard variable rate when the term ends, which is more expensive.
How much does it cost to transfer a mortgage from one bank to another? ›The exact fee should be stated in your mortgage contract. Appraisal fee: Your new lender will want an appraisal done on your home. It typically costs between $150 - $500. Assignment fee: Your existing lender will charge $5 - $395 to switch mortgages to your new lender.
Can I move my mortgage to another bank without refinancing? ›
Yes. Federal banking laws and regulations permit banks to sell mortgages or transfer the servicing rights to other institutions. Consumer consent is not required.
Why can't I transfer my mortgage? ›Not all mortgages can be transferred; if they are, the lender has the right to approve the person assuming the loan. Mortgage lenders often include a due on sale clause in their loans that prohibits a home seller transferring a mortgage to a buyer.
Will interest rates go down in 2023? ›1) Interest-rate forecast.
We project a year-end 2023 federal-funds rate of 4.75%, falling below 2.00% by mid-2025. That will help drive the 10-year Treasury yield down to 2.25% in 2025 from an average of 3.5% in 2023. We expect the 30-year mortgage rate to fall from an average 6.25% in 2025 to 4% in 2025.
If the borrower is performing its obligations under the loan agreement, the lender cannot demand early repayment of the loan or take any steps to recover amounts from the borrower. The only option therefore, is to look to transfer the loan to another lender.
Can you switch loan types? ›If you have decided to change loan programs, contact your Loan Officer to discuss your options, but keep in mind that your pricing and closing date could be impacted. Generally, changing loan programs could require a new application, and at a minimum, will trigger a waiting period before closing.
How long does it take to transfer a mortgage? ›How long does it take to port a mortgage? If your lender lets you progress with a mortgage port, moving a mortgage to your new property could take anywhere from 30 days to three months to complete, giving you time to move in to your new property.
How long does it take for a bank to transfer a mortgage? ›The timeframe in which it takes for mortgage funds to be released does vary between lenders, however, it is common for funds to be released within between 3 and 7 days.
What happens to escrow when mortgage is transferred? ›In a transfer situation, the original servicer will transfer the escrow funds to the new servicer. Your insurance company and local taxing authority will be notified regarding the transfer so they know who to bill. If you do not have an escrow fund, then the new loan owner cannot require that you establish one.
Is it hard to switch from FHA to conventional loan? ›Yes, you can refinance out of an FHA loan as long as you qualify for a conventional loan with a credit score of 620 or higher and have 5% – 25% equity in your home. If you have 20% equity, you may also be able to remove your mortgage insurance and lower your monthly payment in the process.
What is the FHA 100 mile rule? ›Using FHA 100 Mile Rule to Count Rental Income
If you're planning to move from one FHA residence to another within 100 miles, you must qualify for both mortgage payments. Even if the prior residence is being rented out, the rental income may not be counted when using an FHA loan on the new home.
How do I take over an existing mortgage? ›
- Review Your Mortgage Documents. It's a good idea to double-check your loan agreement to see if you're allowed to transfer the mortgage. ...
- Request a Transfer. Contact your lender to initiate the transfer. ...
- Consider Extra Help. ...
- Complete the Transfer.
There's no limit on the number of times you can remortgage your home, but most people do it when their fixed-rate period ends. Whether you decide to remortgage early or at the end of the fixed-rate, it's vital that you have all the details so you can make an informed decision about remortgaging.
Can you go through underwriting with two lenders? ›You can apply to multiple mortgage lenders and it won't negatively impact your credit score so long as all the credit inquiries happen within the same 45-day window. Within that time period, multiple credit checks from different mortgage lenders are recorded by the credit bureau as a single inquiry.
Can I lock a rate with two lenders? ›While you can technically lock your rate in with multiple lenders, doing so implies you are following through with the loan application process. Locking your rate also triggers a credit check and sometimes other fees, which you may be responsible for paying even if you decide to do business with another company.
Can you switch lenders after offer is accepted? ›Know that you're free to switch lenders at any time during the process; you're not committed to a lender until you've actually signed the closing papers. But if you do decide to switch, re-starting paperwork and underwriting could cause delays in your home purchase or refinance process.
Is it best to switch mortgages? ›Finding a new deal could let you reduce the loan size and potentially get you a cheaper interest rate. Be aware, though, that if you're currently locked into a fixed-term mortgage deal, you'll usually face a charge for leaving. You'll need to weigh up the potential savings in interest against the cost of switching.
What happens if you lock in a mortgage rate and the rate goes down? ›When you lock your interest rate, you're protected from rate increases due to market conditions. If rates go down prior to your loan closing and you want to take advantage of a lower rate, you may be able to pay a fee and relock at the lower interest rate. This is called "repricing" your loan.
Can you switch mortgage lenders after locking rate? ›Yes, you can change lenders after locking a rate. But you'll have to start the application process over with your new lender. That means getting pre-approved, submitting all your documents, and waiting for underwriting — twice. All in all, closing a mortgage or refinance usually takes more than a month.
Is switching to a 15 year mortgage worth it? ›In general, it is a good idea to refinance to a 15-year loan if: You can get a lower rate than your current mortgage rate, ideally by at least a half to three quarters of a percentage point. You'll be in your home long-term. You can afford the higher monthly payment.
Is it OK to change mortgage broker? ›Yes, you can switch mortgage brokers. However, unless you feel that a mortgage broker is really not working in your best interests, you may want to think twice about changing brokers during the application process.
Does it cost money to transfer between banks? ›
Many banks allow external bank transfers from one of your accounts to another without charging you any fees—although your bank may still have limits on how much money you can transfer, or it will cap the number of transfers you can make within a given period.
How do I know if my loan is assumable? ›To know whether your mortgage is assumable, look for an assumption clause in your mortgage contract. This provision is what allows you to transfer your mortgage to someone else. Remember that if assumption is allowed, the mortgage lender will typically hold the new borrower to the loan's eligibility requirements.
How high will mortgage rates go? ›Refinancing rates remain three percentage points higher than the prior year. So if you're part of the roughly 85% of homeowners with a mortgage rate locked in at less than 6%, 2023 may not be the right time to refinance. Many experts predict that 30-year fixed rates will average around 6% for most or all of the year.
Can I be removed from a mortgage without refinancing? ›If you can't refinance your existing mortgage, your lender may require you to pay off the loan in full in order to remove someone from a mortgage. This closes out the loan and removes your name as well as any co-borrower or co-signer from the mortgage.
What is porting a mortgage? ›Porting your mortgage is where you buy a new home, but keep your existing mortgage deal or rate. You “port” your deal from your current home to your new one.
What mortgages are assumable? ›Some of the most popular types of mortgages are assumable: Federal Housing Authority (FHA), Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA). Buyers who wish to assume a mortgage from a seller must meet specific requirements and receive approval from the agency sponsoring the mortgage.
How hard is it to transfer mortgage? ›In general, transferring a mortgage is difficult. If you have an assumable mortgage, the new borrower would be able to pay a flat fee to assume the existing mortgage and all debt. Most government-backed loans, such as VA or FHA loans, are usually assumable. However, most other loans will not be assumable.
Is it possible to transfer your mortgage to another house? ›The short answer to this question is 'yes' – it is generally possible. Most mortgage lenders allow you to undertake a mortgage transfer, or port your mortgage from one property to another.
Is it common for home loans to be transferred? ›Mortgage transfers by lenders are quite common. Unlike the borrower's ongoing obligation to make payments, the lender only has to receive payments and enforce the debt.
What will interest rates be in 2023 2024? ›| Loan Type | 10-Year Treasury Note High Yield | Fixed Interest Rate |
|---|---|---|
| Direct Subsidized Loans and Direct Unsubsidized Loans for Undergraduate Students | 3.448% | 5.50% |
| Direct Unsubsidized Loans for Graduate and Professional Students | 3.448% | 7.05% |
How high will home interest rates go in 2023? ›
The Mortgage Bankers Association predicts rates will fall to 5.5 percent by the end of 2023 as the economy weakens. The group revised its forecast upward a bit — it previously expected rates to fall to 5.3 percent.
What will mortgage rates be in 2024? ›These organizations predict that mortgage rates will decline through the first quarter of 2024. Fannie Mae, Mortgage Bankers Association and National Association of Realtors expect mortgage rates to drop through the first quarter of 2024, by half a percentage point to about nine-tenths of a percentage point.
Does loan transfer affect credit score? ›The simple act of performing a balance transfer isn't going to affect your credit score much, if at all. The key to changing your credit score is to use the transfer to reduce your debt — both in dollar terms and as a percentage of your available credit.
How much does it cost to take someone off a mortgage? ›If the lender won't change the existing loan, your co-borrower will need to refinance the home into a new mortgage. Does it cost to remove a name from a mortgage? Yes. Refinancing to remove a name requires closing costs, typically ranging from 2% to 5% of the loan balance.
Why do banks sell home loans to other banks? ›The main reason is to allow lenders to afford to lend money to new home buyers. It's common practice to sell mortgages so that lenders can get more money to help finance additional mortgages.
Can a lender back out after pre approval? ›Getting pre-approved for a loan only means that you meet the lender's basic requirements at a specific moment in time. Circumstances can change, and it is possible to be denied for a mortgage after pre-approval. If this happens, do not despair.
Can I take another loan on existing loan? ›You can unlock better offers based on your past repayment
When applying for another loan, approach your existing lender for funds first. If you have maintained a good repayment record with this lender, it is likely that you will get another loan to meet your additional needs, easily and quickly.
A lender may accept an appraisal transfer from a different lender. However, the lender delivering the loan to Freddie Mac makes all representations and warranties that the loan complies with the requirements of the Guide and related documents. Lender A must be named as client on the appraisal report.
How do I know if my mortgage is assumable? ›To know whether your mortgage is assumable, look for an assumption clause in your mortgage contract. This provision is what allows you to transfer your mortgage to someone else. Remember that if assumption is allowed, the mortgage lender will typically hold the new borrower to the loan's eligibility requirements.
Can I change mortgage companies without refinancing? ›Can I switch mortgage companies without refinancing? No, borrowers do not choose who services their mortgage. If you're unhappy with your servicer, you'll need to refinance to a new loan, using a lender that does not work with that servicer.
What is the notice of transfer of mortgage ownership? ›
Loan Ownership Transfer Notices
If your current lender transfers ownership of your loan to a new owner, the new owner must send you a notice no later than 30 days after the date of the transfer. The notice must include, among other things, the name, address, and telephone number of the new loan owner.
Conventional loans
In most cases, they aren't assumable because the mortgage contract contains a due-on-sale clause, which allows the lender to demand you pay the entire remaining loan amount as soon as the property is sold.
Not assumable means that the buyer cannot assume the existing mortgage from the seller. Conventional loans are non-assumable.
What mortgages are not assumable? ›Unfortunately, most conventional mortgages are not assumable. However, loans that are insured by the Federal Housing Administration (FHA) or backed by the Department of Veterans Affairs (VA) or United States Department of Agriculture (USDA) are assumable as long as specific requirements are satisfied.
Can I request my mortgage be sold to another company? ›The only way to change mortgage servicers is to refinance your loan and move to a lender that services the loans they originate. Keep in mind, just because a company services a loan today doesn't mean they'll continue to do so long term.
How can I lower my house payment without refinancing? ›- Cancel your mortgage insurance. ...
- Request a loan modification. ...
- Lower your property taxes or homeowners insurance. ...
- Recast your mortgage. ...
- Make one extra payment per year. ...
- Round up your mortgage payment each month. ...
- Enter a bi-weekly mortgage payment plan.
One of the first reasons to avoid refinancing is that it takes too much time for you to recoup the new loan's closing costs. This time is known as the break-even period or the number of months to reach the point when you start saving. At the end of the break-even period, you fully offset the costs of refinancing.
How much does the average homeowner owe on their mortgage? ›| State | Median Monthly Payment | Average Mortgage Balance |
|---|---|---|
| California | $2,282 | $371,981 |
| Colorado | $1,681 | $273,718 |
| Connecticut | $2,096 | $224,336 |
| Delaware | $1,563 | $190,846 |
You can't add a co-borrower without refinancing your mortgage. It allows you to change the terms of your home loan and add or remove names from mortgages. A mortgage can change the interest rate, payoff date, monthly payment, and name.
Will taking my name off a mortgage affect my credit? ›Removing a borrower from the loan doesn't change the way the property will be titled nor does it prevent the person removed from being released of any liability should something happen to the primary borrower. Removing a borrower simply removes the lower credit score from being used when rate pricing.
Can you transfer an existing mortgage to another person? ›
You can transfer a mortgage to another person if the terms of your mortgage say that it is “assumable.” If you have an assumable mortgage, the new borrower can pay a flat fee to take over the existing mortgage and become responsible for payment. But they'll still typically need to qualify for the loan with your lender.
Do you skip a payment when your mortgage is transferred? ›You have a 60-day grace period after a transfer to a new servicer. That means you can't be charged a late fee if you send your on-time mortgage payment to the old servicer by mistake — and your new servicer can't report that payment as late to a credit bureau.
Can a family member take over a mortgage? ›Mortgage: Federal law requires lenders to allow family members to assume a mortgage if they inherit a property. However, there is no requirement that an inheritor must keep the mortgage. They can pay off the debt, refinance or sell the property.