If you have had your current home loan for a number of years, it is likely your needs have changed. Your financial situation may be different today, however, your current home loan may not have kept up and have the range of flexible features and add-ons that are now available.
It may be a good time to review your home loan to ensure it is still helping you achieve your financial goals and has all the features that you value and need.
There are a number of reasons for refinancing your mortgage:
- A better interest rate or new features and add-ons such as flexible repayments or redraw facilities;
- Ability to utilise the equity in your home to renovate or purchase another property;
- Ability to consolidate debt as it presents an opportunity to repackage your existing loan together with other debts.
Before you make the switch, take into consideration the following:
- Research – the primary reason many seek to refinance is to assess a cheaper or more competitive rate. Take advantage by shopping around. Ask yourself why you want to refinance and do some research to ensure the new loan meets your needs and that you truly benefit from the new refinance situation. In essence, look for lower repayments, better rates, less fees and/or more features.
- Cost – it is important to check the conditions of your existing loan to determine the costs of refinancing. Factor in fees or deferred establishment fees and break costs. Check your current loan policy contract and you should only do this if you are in a better long term option even with these fees.
- Debt consolidation – often a driver of change as it represents an opportunity to repackage your existing home loan together with other details such as credit cards, personal or car loans. This can benefit you by reducing your overall monthly repayment amount, as well as allowing you to move to a more competitive home loan. Just ensure that you cancel your credit cards and close any personal loans as soon as you refinance.
It can be confusing to know whether you should refinance and what is important to you. Whilst rates are important, getting the right features can ensure you get the right loan for you today and tomorrow.
If you are considering refinancing your mortgage, talk to us today.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.