Understanding Refinancing for Home Loans

With the lowest official cash rate on record, it might be time to refinance your home loan. What you may have agreed to 5 years ago when you bought your house, may not be the best option for you now.

Refinancing involves replacing your current loan with a new one that usually has different features such as a lower interest rate, lower fees or a different mortgage term.

With most mortgages just becoming a ‘set and forget’ once it’s been organised, many borrowers may be potentially costing themselves thousands by not refinancing their loans. With help from our team, we can evaluate your current options and organise to refinance your mortgage

Lower Rate

One of the most common reasons individuals refinance is because they have found a lower interest rate. Having a lower interest rate could not only reduce your monthly repayments, which could provide you with the opportunity to invest those savings elsewhere or simply pay down your mortgage quicker. It’s important to speak with your mortgage broker who can help you research and calculate if the lower interest rates will save you money in the long term.

Changing to a Fixed Rate Mortgage

With the lowest interest rates in history, it may be a good idea to fix your interest rate on your mortgage. With a fixed interest rate, you’ll have the sense of security that your interest charge will always be the same, regardless of the market conditions, making it easier to plan and budget for.

Extend or Shorten Term

Refinancing your home loan gives you the opportunity to reduce or increase your mortgage term. Deciding between extending or shortening your loan term, is utterly dependent on your financial circumstance. With a shorter term, you’re paying less interest overall, however changing to a longer term loan could decrease current payments. Have a chat with your mortgage broker who can work with you to determine what is best for your financial situation.

Want to refinance your home loan? Get in touch with our team who can help you navigate the process!