Should I consider refinancing my home loan if I am offered a lower interest rate?
The main consideration in refinancing would be the costs involved.
As you are clearly aware, you have incurred a substantial amount to pay for the necessary fees to obtain your first loan. For example, processing fees, legal fees, stamping and transfer fees. Refinancing 1 means you would have to incur the same charges again.
Before you decide to refinance, you should ensure that the savings from the lower interest rate is enough to compensate all the costs incurred associated with refinancing, including penalty charges, if any.
- Refinancing - The process of paying off a portion or the entire amount of the existing loan with the intention of obtaining another loan from the same or another financial institution.
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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