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Why Refinance Your Home Loan?

For previous generations of home owners, taking out a mortgage often meant sticking with the same loan and lender for the full term. Not so these days. In the 12 months ended August 2017 for instance, over 200,000 Australians refinanced their home loan[1]. These sorts of numbers make it logical to ask “why refinance your home loan?” In fact, there can be plenty of reasons why refinancing makes good financial sense. Save with a lower home loan interest rate The home loan market is very competitive, and lenders are constantly vying for your business. However, some may reserve their best deals for new customers. If you’ve had your loan a few years, chances are you could secure a better deal by refinancing. Pay your home loan off sooner A lower rate doesn’t just mean savings on the long term cost of your loan. It can also reduce monthly repayments, freeing up extra cash to make additional repayments, and that can be the key to paying off your loan sooner. Access better loan features As our lives change, the sort of loan features we need can alter dramatically. A first home owner for instance may not have much scope initially to grow spare cash, but this can change very quickly, and an offset account can start to hold plenty of appeal as a way of using savings to trim interest costs. Even if your circumstances haven’t changed, it’s worth taking a look to see which innovative features you could take advantage of. Home loans are becoming more flexible all time, and new types of features can be a cue to refinance your loan. Forge ahead with debt consolidation Debt consolidation is the process of folding multiple debts into a single low rate loan – usually your home loan. This can lower the rate you pay across all your debts to provide valuable savings on repayments, and free up extra cash to pay off your loan sooner. Switch between different types of rates Refinancing can be a chance to lock into a competitive fixed rate and enjoy more certain repayments, which makes your loan easier to budget for. Conversely, if a fixed rate term is about to expire, refinancing can let you make the switch back to a more flexible variable rate home loan. Put home equity to work Home equity is the difference between your home’s market value and the balance owing on your loan. It’s money you can access by refinancing your loan, and the available funds can be put to work achieving personal goals like renovating your home, buying a new car, taking a holiday or paying for your children’s education. The key is to consider why you want to refinance and be sure that it’s the right step to achieve your goals. That's where we can help. Take the first step by calling us on 1300 861 143.

Source: Members Equity Bank Limited


This information is current as at 29/01/18. This article has been prepared by Heart1Stop, a social media brand owned by Heart Mortgage Services and Heart Financial Advisers. The information contained in this article is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The views expressed here are not those of Heart1stop, Heart Mortgage Services, Heart Financial Advisers, shareholders, directors or staff and associated contractors and business associates. This article has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this article, consider its appropriateness, having regard to your objectives, financial situation or needs. Any taxation information contained in this article is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual’s situation may differ, and you should seek independent professional taxation advice on any taxation matters. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of Heart1Stop or Heart Mortgage Services and Heart Financial Advisers that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party of Heart1Stop or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties ("Third Parties") who are not related to Heart1Stop. These links are provided for convenience only and do not represent any endorsement or approval by us.

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