How to save money on your current loan?
See if you could save with our free home loan health check
Home loan interest rates have dropped to all-time lows. There is competition for your mortgage out there! You may be surprised at the different choices available to you such as a home loan that is more suited to your budget and needs, and potentially at a lower cost.
Mortgage Choice Mentone can give you a free home loan health check to see if your current loan is still right for you, or whether you could potentially benefit from considering other options. All it takes is an hour of your time, and it could save you money in the long run
Refinancing a home loan involves:
- Replacing your current home loan with a new one
- Refinancing your home loan can offer savings on interest and/or better loan features
- There are costs to weigh up when refinancing your home loan
- Your Mortgage Choice broker can explain how to refinance your home loan
Should I Refinance?
If you’re keen to secure a better interest rate or enjoy more loan features, refinancing your home loan can be the solution. Refinancing is also an opportunity to get control of debt or tap into any home equity you’ve built up.
Refinancing to secure a better interest rate
The most popular reason homeowners choose to refinance a home loan is to secure a lower interest rate and reduce their monthly repayments. However, refinancing can come with some costs, so it's essential to weigh up the savings of refinancing against the expense involved.
Switch between variable/fixed rates
If you'd prefer the certainty of repayments will stay the same for a period of time, you may wish to switch to a fixed rate. Refinancing your home loan lets you do this. Or, you may decide you'd like to take advantage of a lower variable rate as you can accept the risk that rates may rise in future.
Refinancing a home loan to access home equity
Your home is likely to be one of your most valuable assets, and by harnessing home equity you have the opportunity to build additional wealth or simply achieve personal goals. Find out more about accessing your home's equity.
Refinancing a home loan to consolidate debt
Like many Australians you could have several debts – probably a home loan, a personal loan, and possibly even a credit card balance. Having multiple debts means juggling lots of different repayments.
Refinancing your home loan can provide an opportunity to streamline your debt, and potentially reduce the overall interest you're paying on multiple debts through the process of 'debt consolidation'. It means folding several high-interest debts into one lower rate debt – which could be your home loan - and this may reduce your total monthly repayments.
However, it's important to note that debt consolidation can come with some downsides. It can turn a short term debt like a personal loan into a long term debt (your mortgage), and that means paying interest on the balance for a much longer period which could cost you more in the long run.
For debt consolidation to be truly cost-effective, you need to commit to making additional repayments to pay off the enlarged loan as quickly as possible.
The video below outlines some of the benefits of refinancing to consolidate debt.