Let’s face it, getting a mortgage is time-consuming and scary. Why on earth would you want to go through that process again by refinancing?
But more and more we’re encouraged to shop around with energy providers, phone providers, even checking the eBay price on our phone while in Myer, to make sure we’re getting the best deal possible.
Given your mortgage is one of your biggest monthly expenditures, why wouldn’t you want to make sure you’re still getting the best deal? Refinancing is simply taking out a new mortgage, with a new interest rate, to pay your existing loan and then, you’ll be subject to the new terms of that loan.
By refinancing, you can:
- Reduce your interest rate and repayments. Changing to a loan with a lower interest rate will reduce the amount you need to repay the bank. Over the term of loan, you could save yourself thousands of dollars in interest repayments. You can also extend the length of your loan, which will also reduce your monthly repayments.
- Consolidate your debt. You might have taken out a personal loan for that trip to Tokyo Disneyland, that car you needed after the summer of storms, or gone a little OTT at Christmas time. Home loan rates tend to be much lower than any other type of borrowing so if your personal circumstances have changed and you do find yourself with additional loans, this could be the chance to pay those off under you home loan and reduce your interest repayments.
- Get additional money to help you achieve your goals. While you’re refinancing, you can take into account major purchases that you know are coming up. For example, you may want to renovate or know that you need a new car. Though this may increase your loan repayments, it’s worth asking the question to understand your options.
Refinancing sounds great! Why doesn’t everyone do this?
There are a few things to consider before refinancing, such as fees when you exit your current loan or apply for a new one. If you’re currently on a fixed rate contract, then the fees to break the contract can be quite high and it’s worth weighing up the benefits you’ll get.
But if you’re thinking about refinancing, click here, and one of our awesome home loan experts will be in touch to talk you through the next steps.
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