Take advantage of refinancing your mortgage. 

Life is always changing. Since you bought your home, your family structure or lifestyle may have changed or your financial situation may be different. There might be another loan out there that’s better suited to your life now. So at some point it may be worth looking at refinancing.

What exactly is refinancing?

Basically, refinancing is when your current loan is replaced with a new one by a different lender. The beauty of that, is that you can look for a better deal, by comparing and choosing a loan based on the features and rates they’re offering.

Refinancing could reduce repayments, allowing you to make extra principal payments and build equity in your home faster.

Why do the refinance dance?

There are lots of reasons you might want to refinance your home loan: 

Lower interest rates

A better interest rate could not only save you money but also help you pay off your home loan sooner. With a lower interest rate, your repayments might be lower every month which means more money in your pocket. But, if you use some of that saved money to continue making larger repayments you might pay your mortgage off faster and save on total interest paid.

You hear a lot about interest rates and the RBA in the news, but all lenders use many different measures to set their rates. So, it’s important to speak to a Home Loan Specialist or Broker to understand what rates you can access.

A loan to suit your needs 

There’s more to a home loan than just its interest rate. If it’s been a while since you bought your house, there might be new features that you didn’t know about. You might want to link various offset transaction accounts to your loan or split your loan between variable and fixed rates with no transfer fees. Some home loans also provide you with a rewards credit card or allow you to redraw without fees. 

Going fixed term 

You could be coming to the end of a fixed rate term and want to see if you can get a better interest rate or a more flexible home loan once your fixed term ends. Fixed rates can work really well in the right situation but often when your fixed rate term ends, you’re rolled over to a higher variable rate by default. By waiting until after your fixed term to refinance you may avoid paying a ‘break cost’ fee associated with leaving a fixed rate home loan, so it’s prime time to look around at what home loan offers are available. 

Paying off your other debts 

You could be trying to simplify your finances and save money by consolidating debts (personal loan, car loan or credit card) into your mortgage. Every lender has different rules about combining multiple debts into one consolidated loan, but debt consolidation is a handy feature of many home loans and might be a reason that you consider refinancing. 

Renovations 

If you’re thinking of renovating, you might already have extra value in your property to utilise.  If your property has increased in value or you didn’t utilise all the available value when you first borrowed, you might be able to unlock this to renovate. 

Find a home loan to suit you. 

Browse our range of home loans 

See how an expert can help you.

Get in touch with one of our Home Loan Specialists, and they’ll respond within one business day.

Things you should know

The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. To the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48123123124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accepts no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.