What is loyalty tax?
Loyalty tax is the premium rate that you pay for sticking for one lender when the same lender is offering cheaper rates to its new customers.
Lenders do this as they assume that once your loan has settled customers won’t continue to check that they are getting a competitive rate.
But when a home buyer is on the search for a new loan, they will ensure they are getting a competitive rate.
Lenders also assume that refinancing is too much of a hassle for those who are attempting to obtain a better deal.
To see if your being charged a loyalty tax, check the rate you’re on and the rate being offered to new customers.
Rory and the team at Own Home Loans are always happy to check this for you and provide guidance in getting the best deal for you!
To learn more about the steps to refinance and to see if refinancing is right for you click here.