“If another bank is willing to provide a lower interest rate, switching can be an enticing option. Even a small reduction of 0.5% in the interest rate could save you thousands over the term of the bond. However, you need to bear in mind that there will be costs, and possibly penalties, involved in switching.
“Before looking at other banks, it would be advisable to speak to a home loan consultant at your current bank and see whether they would be willing to look at renegotiating the interest rate. If the response is positive, you may have saved on interest without having to pay any additional costs.”
However, there are other costs involved in switching, such as attorney fees, registration costs and an administrative fee, Goslett says.