Why refinance your home loan?

Pay off your home loan faster

Refinancing your home loan, is it right for you?

Wanting a lower interest rate, consolidating other debts into one easy to manage repayment and accessing your equity are just some of the reasons why you may choose refinance.

The decision to refinance your home loan is made when you realize your current home loan is no longer suited to your financial situation.

Refinancing your home loan and consolidating your debts could improve your cash flow so can clear your home loan sooner.

Once you’ve made the decision to refinance your home loan, it is imperative to thoroughly consider all the options available to you, to ensure that re-financing a viable option for you.

Why consider refinancing and consolidating debts

Your life never stands still, and neither should your mortgage.

Your home loan might have been right for you when you took out your mortgage, but as your life changes, so do your lending requirements and it might be time to search for a more suitable product.

You may be able to refinance and find a loan that’s more appropriate for your needs, with more suitable features and a competitive interest rate to match.

Are your finances stressing you out and causing you to...

  • stay awake at night with anxiety?
  • have arguments over money almost daily?
  • constantly worry about your family and their future?

Switching lenders for a better home loan deal.

Imagine if you could eliminate your financial stress and...

  • Know you’re financially secure
  • Enjoy life without thinking about money every moment
  • Confidently be on track to a secure financial retirement
  • And enjoy that restaurant, that holiday, and other leisure activities you dream about!

The good news is, it’s all possible — even if you’re overwhelmed by debt right now. Refinancing and consolidating your debts could improve your cash flow and financial security. Lets get in touch!

Lets Get In Touch!

5 reason to refinancing and consolidating your debts?

Pay off your mortgage faster!

If you’re striving to be mortgage-free, there’s a good chance there may be a more appropriate home loan product to meet your needs.

Some mortgage products are designed to motivate borrowers to repay their mortgages quickly.

So now is the perfect time to talk to your mortgage broker and consider whether a new home loan will see you on the road to financial freedom – fast!

Consolidate your debts

When refinancing your home loan, this is an opportune time consolidate your other debts, such as credit cards or personal loans, into your home loan. This could save you thousands of dollars in interest charges. Rolling your debts into one monthly or fortnightly repayment can also help make juggling your finances a little easier while improving your cash flow.

Better interest rates and lower repayments

Interest rates and mortgage deals are constantly on the move. To make the most of a competitive mortgage market, you might want to evaluate the loan product you currently have.

For example, you may want a lower variable-rate or lock into a fixed-rate.

Before refinancing your home loan, you should approach you current lender to see it they offer you a better home loan deal first.

Avoid monthly fees and charges

Some lenders charge a monthly account keeping fee – further adding to your debt. Competition between lenders has increased and some now waive administration fees, so re-financing your home loan with another lender can be a smart move to help cut your mortgage costs.

Unlocking equity

Another benefit of re-financing your home loan is it gives you an opportunity to restructure you home loan for future purposes and to access your equity.

As you pay off your mortgage you’ll accumulate equity in your home. You can then use your equity for other purposes such as purchasing an investment property or debt consolidation .

As long as you are capable of meeting your home loan repayments, refinancing your mortgage can help you tap into the equity that you’ve built up.

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Frequently asked questions

What is refinancing?

Refinancing is when you change your current home loan to a new home loan that satisfies your current financial situation. Refinancing can be done as a internal refinance (stay with the same lender) or externally (refinance your home loan to a new lender).

Is it worth refinancing?

The most common reason to consider refinancing your home loan is to obtain a better interest rate. However, make sure you account for all the fees involved to refinance.  Depending on your reason to refinance you need to see if you are saving a enough on interest and fees to make the process  a viable option. If your LVR (loan-to value-ratio) is over 80% then you could also be required pay Lenders Mortgage Insurance.

How much does it costs to refinance?

The costs to refinance could include:

  • Discharge fee from the existing lender
  • Lender establishment fees
  • Mortgage Registration fee
  • Mortgage registration fee
  • Fixed rate break costs if you are breaking a fixed rate home loan
  • Lenders mortgage Insurance of the loan is above 80%  LVR

Give us a call 0401 388 153 and will review your situation to see if refinancing to the right option for you.

Should I consolidate other debts into my home loan?

The benefit of consolidating other debts into your home loan are you could have lower monthly repayment and also save on interest costs. However, you need to be mindful that you are paying these debts over a longer time (up to 30 years). Even though your scheduled loan repayment may be lower, the secret is keep paying the higher loan repayment and pay off your home loan years earlier.

Like to know more? Schedule a suitable time to chat about how refinancing could help you CLICK HERE

If I refinance, will that mean starting the loan term again?

You could request a shorter loan term, rather than starting a new 30 year loan term. Depending your personality regarding credit, if are tempted to just make the lenders minimum repayment and not be disciplined enough to keep paying the higher repayment, then selecting a shorter long term might be the best option for you.

Book a call with Your Home Loan Consultant for full review of your situation  and find out if refinancing is right for you. 

What are the benefits of refinancing?

Reasons for wanting to refinance your home loan can vary for everyone, depending on your personal situation.

Some of benefits refinancing could be to:

  • Better manage your finances
  • Consolidate your debt into one repayment (for example, personal loans or credit card debt)
  • Get a better home loan product with more flexible features
  • Reduce your loan repayments by securing a lower interest rate
  • Invest in shares or property using the equity of your home
  • Consolidate your debt into one repayment (for example, personal loans or credit card debt)
  • Unlock some extra cash to renovate your home
  • Repay your mortgage faster

Three questions to ask before you refinance?

Before you make the decision to refinance your home loan, there are a number of areas to consider. Here we cover off some questions you should ask before making the switch.

Will I be better off in the long run?

Refinancing your home loan to a lower interest rate can be a great way to lower monthly mortgage payments, freeing up some of your income for spending in other areas.

However, opting for lower repayments will usually mean signing up for a longer loan period and the longer you take to repay your home loan, the higher the accumulated interest payments will be.

Before refinancing, do some calculations to see how the new loan will stack up in the long run.

If you find your total interest payments are higher under the new loan term, you might want to consider adjusting the amount you pay each month (if the mortgage terms allow) to help you to become mortgage-free sooner.

What are the costs of switching lenders?

Switching to a new lender can come with a number of associated costs, so it is important to ask your mortgage broker about these before making any changes.

Some of the costs you need to be aware of include:
Bank fees. When you close your home loan account, you may be hit with a discharge fee (typically $100-$400) or break fees if you are ending a fixed rate loan before the end of the fixed term. Your new lender may charge fees for processing your new application, valuing your property and settlement.

Depending on the cost of each fee this could bring your total set up expenses to $300-$1000.

If you are staying with your current lender but moving to a new product, you may also be charged a variation fee for this.

Any lender fees accrued when refinancing will be added to your new loan, so to avoid paying interest on these over the life of your loan, you may want to consider paying off any costs when they are first charged.

Lenders Mortgage Insurance (LMI). For each new loan, a lender will look at the loan-to-value-ratio (LVR) to assess whether Lenders Mortgage Insurance is required. If you are borrowing more than 80% of the current value of the property, you will have to pay Lenders Mortgage Insurance again.

To avoid paying Lender Mortgage insurance, your mortgage broker may be able to arrange an upfront valuation of your property, so you will know whether you will be liable for Lenders Mortgage Insurance before proceeding with a refinance.

What are the loan features I will require?

Choosing a new home loan involves much more than finding the lowest interest rate. Home loans come with a range of features, which can provide flexibility and help you pay off your mortgage faster.

Depending on the lender and home loan type you choose, some of the features you might be able to access include an offset account, free redraw, unlimited extra repayments and direct salary crediting.

There are many things to consider before signing up for a new loan, so do your homework to ensure you are getting the best deal.

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About Us

James Sylvester commenced Mortgage Brokering in 2009 and launched the Mortgage Broker Brisbane business "Your Home Loan Consultant" in February 2012.

James Sylvester

James Sylvester

principle of your home loan CONSULTANT

James Sylvester's knowledge and experience provides his clients with a unique service offering.

As "Your Home Loan Consultant", you can rest assured knowing that we will always have your best interests in mind.

With over 10 years of experience in the finance industry, our team in Brisbane are here to assist you.

We pride ourselves on transparency and communication, and no matter what you need – we are never more than a phone call away.

Your Home Loan Consultant is a full-service Mortgage Brokerage. Assisting first home buyers to get into their own home and then with the correct guidance show them how to create wealth through property investing.

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