Refinance Benefits
Refinancing your home loan can be a smart financial move. This short guide highlights the key benefits- like lowering your interest rate, reducing monthly payments, or accessing equity-so you can decide if it's the right time to refinance.
1. You want a lower interest rate
Refinancing for a lower interest rate can have two positive results: helping you pay off your home loan sooner and giving you more financial flexibility. This might result in lower monthly payments, which gives you more money to work with. Plus, if you use some of that extra money to make bigger payments,
you could speed up your mortgage repayment and reduce the overall interest you pay.
2. You want a loan to suit your current needs
You might find it interesting to know about features that can help you reduce your home loan interest and pay off your loan faster. These could include things like offset transaction accounts or the option to make extra payments.
You might also like the idea of splitting your loan between variable and fixed rates. Certain home loans might even let you decide how often you make repayments, offer a rewards credit card, or allow you to take back any extra payments you've made without charging you fees.
3. Consolidate debt
For people who have additional debts like personal loans, car loans, or credit cards, refinancing to consolidate debt can be a wise choice. Debt consolidation means putting together these other debts with your home loan.
This simplifies things, as you only make one monthly payment instead of many. Because home loan interest rates are usually lower than rates on other types of debt, consolidated debt generally comes with a lower interest rate.
4. Your fixed rate period is expiring
When your fixed-rate loan period is ending, it's a good idea to think about refinancing. This could help you avoid a fee for ending the fixed rate early. After your fixed rate ends, your loan will switch to a variable rate automatically.
You might want to think about getting another fixed rate, or it could be a good time to refinance for a better deal.
5. You want to renovate
If you're thinking about renovating your home and you need more money to help pay for it, you could think about refinancing. If your property is worth more now and you have enough ownership value in your home loan, you might be able to use this to get the extra money you need for the renovation.
6. Change Lenders
If you're unhappy with the way your lender is treating you, you might think about refinancing. For instance, you might be unsatisfied because of: Bad customer service. Payment options that don't work well for you.
A mobile app or in-person services that aren't good enough. Ethical concerns – like if you don't agree with how your lender uses its money or it could be any other reason.
7. You want to invest
If you’re refinancing to access the equity in your home, you could use those funds to invest in property, shares, or other opportunities.
8. Extend or reduce your home loan term
Sometimes, your situation may change, and your home loan term doesn't fit anymore. You can change the length of your home loan by refinancing. If your income has gone up, you might be able to pay more each month than before.
Or you might need to lower your monthly payments. If you refinance to a longer loan term, it can help with that.
9. Accomplish your own goals
Your home equity can be used for more than just investing. You can use some of the equity you've built up to achieve personal goals. Maybe you want to take a special vacation with your family, pay for your kids' education, or get something like a new car or caravan for fun times.
10. Switch from specialist lender to major lender
Refinance your home loan back to a major lender after your credit problems are over. Our Home Loan Specialists are here to help you come up with a plan. Let’s talk!