What You Need To Know
Interest Rate Cycle
Few bankers or even mortgage brokers walk you through this but that makes all the difference. The interest rate cycle forms the basis of all our recommendations at MortgageWise.
That’s how we aim to save you 10X more than the difference when you compare between home loan packages (usually not more than 0.20%). Definitely more than any vouchers or cash back offered. Find out how.
1. I am new to this. How difficult is it to refinance?
With our end-to-end mortgage solution, refinancing is now a breeze. We’ll help you compare all the packages, recommend the right one based the interest rate cycle, get our experienced banker to contact you. You can apply with SingPass via MyInfo remotely (depending on the bank chosen), wait a week for approval, digitally sign & accept the letter of offer (LO).
Next, we’ll get our partner law firm to contact you where you will instruct them to serve the standard 2 month notice of redemption to your existing bank. The only thing left to do is to make a trip to the lawyer’s office about 3-4 weeks before the completion to sign the mortgage documents. On completion date, your loan pops over and start servicing once you get the mortgage statements.
2. How early can I start?
Unknown to many, you can start to source for lowest mortgage rates as early as 6 months before the expiry of your lock-in period. This is imperative in periods in the cycle where interest is moving very quickly either upwards or downwards. You’ll get to lock down a good fixed rate much earlier during upswings or switch to a SORA floating rate with super-low spreads during downturns (spreads typically compress at cycle peaks).
You can do that as banks do allow you to draw down or bring over the loan within a stipulated period of 3 to 6 months from the date of LO.
3. What’s the costs involved and must I really refinance?
We provide a breakdown of the costs and benefits below. In general, for a minimum loan of $500,000, most of the transaction costs are covered by subsidies (legal and/or valuation) from the new bank who wants your business. So, there’s every reason to leave especially if your existing bank wants to charge you a repricing or conversion fee.
However, most of the savings would come from the interest differentials between what’s the lowest in the market and what your current bank is offering you. Different banks may face different cost considerations at varying points in time and that’s why you ought to leverage “free market” to save more over the long-term.
The best answer to this is another question – will you spend 10-15 minutes on some paperwork, make a trip to the lawyer’s office, and get paid $1,000 (average savings) or more for your time?
4. Why should I work with a trusted broker long-term?
Every time your loan comes up for renewal (provided you remember to do that early), you can always google online, speak to different brokers, or call the various banks’ hotlines direct, wait for return calls, compile your own excel before you get mixed up, etc.
Or there’s an easier way when you work with us throughout your loan tenure as what most of our clients have discovered. Through the interest cycle, we have helped to prompt and remind them to lock down fixed rate before the last surge 2016-2018, switch to floating 2019/2020, and lock down fixed rate early again end-2021/2022.
So don’t just google for the lowest rates – that difference of 0.05-0.10% between packages pales in comparison to the enormous savings when you take action 4-6 months ahead of any market trends. Rather, choose to work with a trusted broker long term who can give you that strategic advantage.
Let’s show you the costs vs benefit and why it’s almost free when you refinance through us:
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