To get a better deal
Do you know the interest rate you’re being charged on your mortgage? Have you stopped to consider how it compares to the interest rate being charged on similar home loan products?
Refinancing your loan could give you access to a more competitive interest rate, especially if you’ve had a home loan for a few years.
Interest rates are currently sitting at historic lows so if your interest rate doesn’t have a 3 in front of it, you may be paying too much.
Your needs have changed
Your financial products should change as your needs do and your home loan is no exception.
If you’ve had a home loan for a few years now, it’s safe to assume your life has changed in that time. You may have started a new job, received a promotion, or gone through significant life changes such as getting married or had your first child.
Refinancing will allow you to ensure your home loan is still in line with your needs and goals.
Pay off your loan faster
Refinancing may put you on the path to paying off your loan faster.
As your needs and financial situation change over the years, you might be able to contribute more towards your home loan and get out of debt sooner.
You may also be able to structure your loan and get more out of it by accessing features such as a redraw facility or an offset account. By paying your salary into an offset account, you reduce the interest you pay on your mortgage each month. A redraw facility allows you to access any additional repayments you’ve made on your loan.
Alternatively, you might want to switch into a simpler home loan with less features.
To access equity
If you purchased in an area that has experienced home value growth while you’ve been paying down your mortgage, you may have a substantial amount of equity in your home.
Equity is calculated by subtracting the remainder of your mortgage from the market value of your home, usually done through a home evaluation.
You may be able to draw down on your equity to help fund a renovation, or upgrade your home. You may also want to use your equity to help purchase an investment property or guarantee your child’s first home.
With this in mind, you should consider speaking to your local Mortgage Choice home loan expert to see if refinancing is a worthwhile decision for you.
At Mortgage Choice we know that no two borrowers are the same. Our experts can give your home loan a health check at absolutely no cost to you and help you switch products if need be. We know the market and can tailor a mortgage to suit your unique financial needs.
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