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There is no greater financial commitment than your home and its loan. That’s why it makes perfect sense to regularly check your home loan health and ensure it’s still working for your particular situation.
Here are five key reasons why you should consider refinancing your loan, not least of which the fact that it could save you thousands of dollars!
- You could score a lower interest rate
This is undoubtedly the most enticing reason to consider refinancing. After all, less interest means more money in your pocket and not the banks. That’s an outcome we’d all love, right?
With rates slowly starting to rise, now is the perfect time to see if you can lock in a better deal and save.
- You could take advantage of a switch between a variable & fixed rate
Another very popular reason to refinance is to switch between a variable and fixed rate. A fixed rate may give you peace of mind as you’ll know exactly how much your monthly repayments will be, without the possibility of it changing.
Or perhaps you’re in the opposite boat – on a fixed rate that is higher than the variable. Switching from one to the other may bring you some considerable savings.
- You might be eligible for a home loan with better features
Home loans change as much as you change your underwear – well, almost! It’s highly likely there are now a range of new features available that weren’t when you set up your home loan. They could save you some serious cash.
For instance:
- Lump sum repayment without fees
- Offset account to reduce your interest
- Repayment holiday (a break from repayments)
- Loan portability (take your home loan with you when you move without completely refinancing)
- You could consolidate your debt
Many of us have liabilities in addition to our home loan. It might be a car loan or credit card debt, and these loans often come with high interest rates. Refinancing might give you the opportunity to merge your loan debts via ‘debt consolidation’. You could potentially reduce the overall interest you’re paying and even reduce your monthly repayments.
- You could release equity in your current property
You might be at the stage where you want to buy an investment property, or perhaps renovate your current home. Maybe it’s time for a trip around Australia or overseas. You can do all of these things by drawing on your most valuable asset – your home.
In years gone by, you could only access the equity in your home by selling and then buying another property. However, things have changed significantly.
Loans today are much more flexible so you can release the equity in your home without having to sell. Reviewing your home loan will show you exactly how much equity is available to you, and refinancing can help you access it for other things.
Not sure you’re ready to refinance?
Refinancing has some amazing benefits but as with most things in life, it can be a little tricky and does have associated costs. In some instances, the costs may outweigh the potential benefits. This is precisely where a good mortgage broker comes in. They can help you weigh the pros against the cons to see if refinancing is right solution for your situation.
If you’d like some further help with your refinancing needs, please get in touch. We’d be happy to spend some time with you to present a host of options to suit your needs, hopefully saving you some cash in the process.