by Paul McBeth
"The essence of saving money on your mortgage is finding a good deal in the first place, and then repaying the mortgage without altering the terms (and therefore paying penalty fees) as soon as possible."
So says the Consumer's Institute, in a Consumer article just out on mortgages. The Institute also says that mortgage reduction agencies can charge high fees for a service you can get much more cheaply through banks and other lenders.
Given the recent barrage of advertising by mortgage lenders, Consumer offers a well-timed reminder that "you can save thousands of dollars on your mortgage, but getting seduced by the ads and lurching from one great deal to the next is not how it's done".
The article says banks can compete vigorously around the edges of the deal, with such things as competitive fixed rate options, prize draws and waived application fees, and many also discount fees on cheque accounts for their mortgage holders. However, Consumer says that this in itself is not likely to make a bank cheaper than a phone/Internet-based lender overall.
Tips it offers for saving money on your mortgage include negotiating, paying fortnightly instead of monthly and paying as much as you can (for more on these and other suggestions, see our earlier articles Put your mortgage on a diet, More slimming tips for your mortgage and Time to prune back your loan).
Consumer recommends checking your statements as mortgage lenders don't always get their calculations right.
It also says that revolving credit facilities can work but only if you're disciplined, the fees and interest rates are low enough and if there's nothing illegal about the scheme. Consumer suggests talking directly to your existing lender and two or three other mainstream lenders, and points out that fees for revolving credit facilities can vary widely.