Home loan holders may have to refinance, expert says

Wednesday 30 December 2009

Article by Mozo

Many homeowners face having to remortgage their properties as a result of rising interest rates next year, an expert has said.

Lisa Montgomery, head of consumer advocacy at Resi Mortgage Corporation, told the Australian Associated Press that with three consecutive rate rises already this year and more predicted for 2010, bank customers may feel they need to compare home loans in search of the best mortgage alternative.

"With rates now widening between loan providers and some borrowers feeling frustrated at an absence of customer empathy from their lender, now is the ideal time of year to decide whether you can work within the features of your existing mortgage to improve your cash flow," Ms Montgomery told the news provider.

She added that some borrowers may be better off paying exit fees for leaving a mortgage to allow for refinancing under a new home loan.

Another means of saving cash includes consolidating credit card debt, which is accruing interest of up to 20 per cent, into a mortgage, allowing the borrower to concentrate on paying off one lower-interest loan, Ms Montgomery said.

Last week, the Daily Telegraph reported Loan Market Group research which found that a growing number of Aussies aged between 18 and 24 years are struggling to secure home loans in the current environment.

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