Since there are so many ways to refinance with a lot of different choices involved, you must have a solid idea of what you’re trying to achieve with this step. Locking this in will help you decide how to move forward and which financial option works best for your circumstances. There are two main reasons people choose to refinance: they want to access the equity in their property or their financial circumstances have changed.
Equity is the difference between the market value of your property and the amount you still owe on it - this is also expressed as your current loan-to-value ratio, or LVR. Houses are by and large an appreciating asset; if you’ve been paying attention to the property market even a little in the last 20 years - they can appreciate quite a lot. This can be hundreds of thousands of dollars made available to you - often to put down a deposit on another property.
When you’re refinancing, we’ll look at your LVR and, as a rule of thumb, lend you enough to bring your total ratio up to 80%. Contact us to confirm your current LVR and answer your questions.
Your circumstances have changed.
Maybe your fixed rate term has lapsed and it’s time to reassess your loan. Or you might be five or 10 years in and your financial situation is different than when you first started - for better or for worse. Whatever life has thrown at you, refinancing your loan can give you a host of options in taking charge of your finances: