Is Refinancing or a New Mortgage Required to Adjust LVR?

Mr Krinkle on 03/12/2022 - 13:40

I have a mortgage with a non-conventional lender that was created with an LVR of 90%.

Fortunately my property has appreciated since purchase putting my current LVR in the 65-70% range

I received a property valuation from my real estate which I submitted to my mortgage company which listed the valuation and recent comparable sales in the area to support their valuation.

My mortgage company contacted me for an appointment and they say a new mortgage needs to be created which comes with several fees. Is a new mortgage required to change the LVR and adjust the interest rate?

While the fees are equal to two months of savings at the reduced interest rate, I'm wondering if there are other options available to avoid the fees of creating a new mortgage?

Thank you in advance for your answers

Financial Home Loan

closed Comments

  • AndyC1 on 03/12/2022 - 13:59
    +1

    You keep saying LVR, but then only mention the lower interest as a side issue.

    Why do you want to lower the LVR, when it has nothing to do with your payments?
    Do you want to get a lower interest rate so that your payments are lower? If you are then this is completely different to lowering the LVR.

    • Mr Krinkle on 03/12/2022 - 14:21

      I would like to lower my interest rate to reduce my repayment.

      • AndyC1 on 03/12/2022 - 16:07
        +1

        Then check out the comparison sites to see what interest rate you can get at other places and see if they give you $X for moving.

  • Mcuser on 03/12/2022 - 14:30

    about to lose that gain probably

  • dcep on 03/12/2022 - 14:52
    +4

    you're not on fixed yeah ?

    find another broker , you're being fleeced

    it should cost you nothing with cashbacks from refinancing , unless you're currently on fixed

    but if you're wanting to stay with current lender, then it'll cost you revaluation fee to unlock that equity, and probably new loan setup fee depending on that particular lender which probably not worth it to stay with current lender if that's the case.

    • Mr Krinkle on 03/12/2022 - 15:32

      Yes I'm on variable.

      There are no cashbacks available from non-conventional lenders. I wont be able to use a conventional lender for another six months.

      Based on your comments regarding the fees it seems like there isn't much I can do as it's aligning with what my mortgage company is saying.

      Thanks for your input.

      • freefall101 on 03/12/2022 - 15:51
        +1

        According to who? If you have a decent LVR and the ability to repay then why not?

        Unless you've absolutely crapped the bed 4 years and 6 months ago, I'd simply go for it.

      • AndyC1 on 03/12/2022 - 16:06
        +1

        The mortgage company will say things that are true, but will not say anything if there are better options at other companies.

        They have a vested interest in keeping you in order to make more profits.

  • garetz on 03/12/2022 - 16:17

    A mortgage is a contract, if you want to change the terms of your contract you might need to pay the fees. You can always refuse to pay the fees and transfer elsewhere instead.

    • miwahni on 04/12/2022 - 02:55
      +1

      A mortgage is a lien over a property, a loan is a contract.

  • miwahni on 04/12/2022 - 02:54
    +1

    You may need to set up a new loan (odd but whatever, each FI is different) but you shouldn't need a new mortgage - the one registered over title should suffice if you're not changing lenders, it doesn't have a dollar amount / loan product / rate registered on it.

  • ModeratorRichardL on 04/12/2022 - 23:52

    OP has received the answers they were after.

    Post closed.

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