Refinancing your home can be a great way to lower your monthly repayments, access additional loan features and help you pay your home loan off sooner. As your circumstances and life continually changes, it is essential that your home loan continues to meet your needs. Even if you have only had a home loan for a few years, it is possible to take advantage of alternative home loan features or even acquire a lower rate by refinancing.
Earlier this month, we saw the official cash rate increase, marking the first-rate increase in 12 years. Rates are expected to continue to rise resulting in Australians with variable home loans to face higher mortgage repayments – so for many, refinancing now may be a great option!
What is refinancing?
Refinancing is the process of taking out a new loan to replace an existing loan. This new loan typically has new terms and additional benefits, such as lower interest rates or a more convenient repayment plan.
Should I refinance my home loan?
If you are interested in securing a better interest rate, switching to a provider with lower fees or enjoying additional loan features, refinancing your home loan can a fantastic solution. Refinancing also provides you with the opportunity to gain control of your debt or tap into any home equity you may have built up.
Why refinance a home loan?
There are many reasons one may choose to refinance their home loan. Some of the most common reasons are:
- Obtaining a better interest rate
- Reducing associated home loan fees
- Shortening or extending your loan term
- Switching between variable/fixed rates
- Consolidating multiple debts into one, easy-to-pay package
- Gain access to equity for a new purchase
- Stabilising household cash flow
- Accessing additional loan features
Are there any costs to refinance?
Depending on your circumstance, refinancing may not always be the best option. It is important that you take into consideration factors such as additional fees when undertaking a new mortgage, Lenders Mortgage Insurance, your financial situation, and other aspects which may affect your ability to comfortably switch. If you are unsure about these factors, come and have a chat with one of our brokers where we can explore the costs involved based on your individual situation and balance these with any potential cost savings from switching to a new home loan.
We’re here to help
Does refinancing sound like the right option for you or something you may consider down the road? Come in and have a chat with one of our experienced brokers so we can explore if refinancing is right for you! To book an appointment email us at enquiries@dominionfinance.com.au or call us at 6162 2740.
