Home Loan Refinancing in Australia
There are important factors to look at when deciding to refinance, such as the remaining loan term and the cost of your principal. Consider why you want to refinance and your current financial situation to help you make the final decision.
Home Loan Refinancing: Things you must know
A lot of homeowners may be tempted to refinance because of potential lower interest rates, however, home loan refinancing should still be made based on your financial situation. Here are things you should consider before refinancing:
Refinancing Costs
The costs of refinancing a home loan could have you paying more than anticipated. It's important to analyze your current home loan deal and compare the full costs of switching loans.
Use a refinancing home loan calculator to easily calculate the difference in how much less interest you will pay versus the total cost of refinancing.
Property Equity
It's also important to consider your equity and current property value when refinancing. The more equity you have lowers the principle you’ll need to borrow and potentially lowers your mortgage interest rate.
Credit Score
Your current credit score also plays a significant role when trying to refinance. It’s important to keep in mind that home loan refinancing represents an application for credit and there is a risk it can affect your credit score.
Home Loan Refinancing is a good option for those homeowners who are seeking a better deal. But before switching, always consider the pros and cons to understand if refinancing is worth it for you.
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of 6 March 2024.
^The addition of offset sub-account means your comparison rate will change.
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