What are the costs to refinance

When it comes to refinancing the big question is will making the switch right now actually be saving you money? We have provided some examples of the costs associated with refinancing to help you make your decision. 

 

Refinancing under 80% LVR

Property Value

$350,000

Refinance amount

$279,000

Costs

$640 **

Total loan amount

$279,640

LVR 

79.90%

 

 

 

 

 

 

 **Cost breakdown:

Lender Settlement fee

$300

Registration Mortgage

$170

Registration discharge

$170

Total costs

$640

 

 

 

 

 

The coststo refinance with an LVR (Loan to Value Ratio) under 80% are actually quite minimal, especially when some lenders offer deals or packages which waive the settlement fee meaning your costs could potentially only be $340. If you are currently paying a higher interest rate than what is currently on offer elsewhere you could definitely be saving money by making the move to another lender.

 

Refinancing above 80% LVR

Property Value

$350,000

Refinance amount

$308,000

Costs

$640

Base loan amount

$308,640

LMI 

$6,654

Total loan amount

$315,294

LVR 

90.08%

 

 

 

 

 

 

 

 

As shown in this example the costs remain the same with a higher LVR but Lenders Mortgage Insurance (LMI) is also added onto your loan which can outweigh any savings you may make with a lower rate especially if you already paid it on your original loan. It is not often we recommend to refinance above 80% LVR however it is possible that it may be the best choice for your personal situation so it is definitely worth looking into. LMI changes depending on the loan amount and LVR so it can sometimes only be quite minimal. It may also still save you money if you are looking to consolidate some debts with your refinance, sometimes the higher interest rates on credit cards can mean that your LMI is less than you would be paying if you left everything as is.

 

If you are thinking of refinancing come in and see us for a no obligations appointment to see what your exact costs are for your personal situation. 

Posted in: Refinancing

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