July 29, 2019 by Isabelle Mun
The home loan market at the moment is looking pretty good. With rates at an all-time low, it begs the question – is it time to reconsider your options when it comes to your home loan?
Whether you’ve not considered refinancing before, or you’ve started some research, it can be difficult to know where to start with reviewing your current loan and how to find if there’s something better out there for you.
But that’s why we’re here. If you’d like to learn more about how refinancing could help you, read on.
Refinancing your home loan essentially means you’re taking out a new loan to pay off your current loan.
Why would you want to do that? Whether you have a specific reason as to why you want to refinance or not, it’s good to know what’s on the market from time to time. Home loan products can change so much over the years. Your Mortgage Choice broker can help you take advantage of a loan more suited to you.
The main reasons to refinance your home or investment loan:
- To take advantage of a better interest rate
- You’d like new features or add-ons to your loan
- Your property value has increased (you may receive a better interest rate as a borrower with more equity)
- Use the equity on your home, for example, to invest in property or renovate
- Consolidate your debts to make managing your money easier
Whether you have a specific reason as to why you want to refinance or not, it’s good to know what’s on the market from time to time. Home loan products can change so much over the years. We can help you take advantage of a loan more suited to you.
What type of repayments are you making?
It’s good to step back and think about what type of repayments you’re currently making and how refinancing could help.
Interest only
Once the interest-only period comes to an end, you might want to see what your repayments would jump to and whether there’s a better option on the market for you.
Principle and interest
If you’re currently paying off the principal and interest, however, your interest rate has changed recently or you’ve found a better and more competitive rate out on the market – this could also be a sign to consider your options to refinance.
Fixed rates vs variable rates
With fixed rates, you have predictable repayments over the fixed period (term) of your home loan. If your fixed rate period (term) is coming to an end and the rate (you’re) you will be charged is quite different, shopping around for a better option may be worthwhile.
Refinancing comes in handy if you want to find a better interest rate, fix part of your loan again or to help with managing your money.
If you’re paying a variable rate, you might enjoy the flexibility of making additional payments, taking advantage of current low-interest rates or want the flexibility to move lenders with (less) fewer fees involved.
Refinancing could open up your opportunities to reduce ongoing fees or take advantage of home loan features you might not currently have.
Other things you should consider
- You need to make sure it’s worth the cost. Refinancing your home loan can come with some unexpected fees. A mix of entry, exit and application fees (and more) may outweigh the cost benefits of refinancing in the first place.
- A chat between us (your broker) and current lender could be worthwhile. We workshop a lower rate or benefits to keep you as their customer. We can ask the questions you might not feel comfortable asking along with the expertise to help you receive a loan most suited to your needs, especially in the current rate environment.
Not sure if you’re in a position to refinance? That’s not a problem, we can help you with that. Our team of Mortgage Choice brokers can help you determine whether it’s the right move for you as well as assist you throughout the entire process. It’s worth talking to an expert.
Get in touch today - call 02 9517 1818 or email newtown1@mortgagechoice.com.au. Or, if you feel like dropping by, you will find us at 557A King Street, Newtown NSW.
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