With interest rates broadening between loan providers and some borrowers feeling frustrated with a lack of customer sympathy from their lender, now is the perfect time of year to decide whether you can work within the features of your current mortgage to improve your cash-flow, or if you’re better off opting to refinance to a new home loan that better meets your needs today.
When considering whether the time is right to refinance, it’s important to know that there are a range of options that mean you can save over the long term.
- Refinancing to a lower interest rate than you presently have. It goes without saying that a lower interest rate means you will save money, but also consider the Reserve Bank of Australia will most likely increase interest rates again in the coming months so grabbing your opportunity of a lower rate now is sensible.
- Switching to fortnightly payments instead of monthly, which not only lessens the impact of paying one large lump sum each month but also means your home loan will be paid off sooner.
- Refinancing can also include consolidating any credit card debt, store card debt and personal loan debt (which is accumulating high interest) into your mortgage. Refinancing these debts into your new home loan will allow you to concentrate on paying off one lower interest loan and can possibly save you thousands.
- Refinancing can allow you to switch to, or from a variable or fixed rate home loan. You may want to take advantage of a low variable rate while it’s available, or perhaps you would prefer to lock in an interest rate you’re comfortable with by choosing a fixed rate which can reduce the risk of higher repayments in the future.
- Another option is directing any savings from other accounts into your mortgage, consequently lowering the principal and reducing your repayments.
Another reason many Aussies are choosing to refinance is to gain access to the equity in their homes. This can be done for a variety of reasons, but commonly people are unlocking their home equity to renovate, purchase an investment property, take a holiday, plan a wedding, purchase a vehicle, pay some outstanding bills or simply to have some extra money to play with.
Another end of financial year is upon us, so if you can benefit from refinancing, now is the time to get your financial affairs in order. Simply fill in an enquiry form to your right or contact one of our refinancing consultants today on 1300 138 188.+++