Should I Refinance My Home Loan?
Updated: Nov 18, 2020
The simple way to answer this question is; do you know your current interest rate on your home loan? If the answer is 'No' then chances are you've not reviewed it in a while and rates have moved. If you do know your home loan rate but it doesn't start with a 1 or 2 then it might be time for a review.
What Is Refinancing?
Refinancing is the process of getting a new mortgage by changing the terms of the one you already have on your home, either with your current lender or a new one. There are many reasons to refinance your mortgage. Some of the common reasons include:
Save money with a lower rate
Reduce your monthly repayments
Get access to extra features in your home loan
Manage debts by rolling them over in your mortgage
Use the equity in the property to fund another property or renovate
How Long Does It Take?
Refinancing doesn't have to be difficult or take a long time, it could take as little as 15min.
If you don't want to change lenders or mortgage product we are able to review your current rate and try to negotiate a discount with your lender (as long as it's not a fixed mortgage). This process is very quick and involves very little effort and could save you thousands.
Refinancing over to a new lender does require some more time and involve some additional paperwork but is generally still a quick process and very little stress compared to purchasing. This generally takes around 30 days to start to finish but involves very little of your time.
Does It Cost Anything Upfront?
In general yes but the exact cost will vary depending on your lender as some may charge exit fees and solicitor fees. Assuming your loan isn't fixed it may cost around $1,000. This can also be added to the mortgage total.
This might sound a lot but part of a brokers role is to calculate at what point in time you start benefiting from the refinance. If for example, you were saving $200 per month in repayments, in just 5 months you would have broken even and moving forwards you would be in a much better position.
If you have a fixed loan or are borrowing above 80% of the value of your home then you may be stung with 'Break Fee' costs or Lenders Mortgage Insurance (LMI). If your not sure on your loan product or any fee's then we can help you find out and see if it's beneficial to switch.
If you wanted to find out more and see how much you could save every month then feel free to contact us today and we would be happy to help.
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WARNING: The contents of this communication are not designed to replace credit advice. We have not taken into account your needs, objectives or financial situation. Please contact us today to find out what's suitable for your needs.