Refinancing simply means switching your old home loan over to a new loan with a different lender. It can sound like a hassle, but it’s surprisingly easy, and there can be big rewards!
Yes, with costs involved, it’s important to know if refinancing your home loan will put you in front financially.
Here’s what to weigh up.
If you want to save on your home loan rate.
Interest rates are at record lows, so if you’ve had the same home loan for a few years or more, chances are, refinancing could see you save with a lower rate.
These days, Australians are actively looking for a better deal on their home loan – and it makes good sense. After all, why pay more than you need to? Better still, the mortgage market is super competitive, and plenty of lenders are saving their best deals for new customers1. So, it’s definitely worth a look to see if you could save.
Even a small rate reduction can put valuable cash back in your pocket and potentially cut thousands off the overall cost of your loan. Our home loan calculator lets you play around with the numbers to see how much you could save by refinancing.
Watch for costs.
Refinancing can come with costs. You may be asked to pay application and valuation fees on the new loan or admin fees when you leave your old loan behind. This makes it important to know exactly how much you can save by making the move to a new home loan.
The best way to know if refinancing is right for you is by speaking with one of our home loan consultants.
Approaching the end of a fixed-rate loan.
It’s definitely worth thinking about refinancing if you’re approaching the end of a fixed-rate loan term. Because some time has passed since taking out your fixed-rate loan, you could find your current lender isn’t so competitive anymore.
Checking out the loan options available before your fixed-rate expires can help you swing into action early. It’s a great way to know you’re continually getting the most competitive loan for your needs.
If you have personal goals lined up.
Home loan refinancing isn’t just about saving with a lower rate. Refinancing can also be an opportunity to unlock your home equity. With that money you could achieve a variety of goals - from renovating your home or paying for your kids’ education to building wealth with an investment property and taking a well-deserved vacation.
Get your finances under better control.
Staying on track with multiple payments can be challenging when you’re juggling a personal loan, a few credit card debts, and maybe a car loan.
Refinancing can let you fold all these debts into one low-rate home loan – a process known as debt consolidation - so you only have to manage one monthly repayment. Debt consolidation can even lower your overall repayments, which frees up funds to help pay off your home loan sooner.
Home loan refinancing can be easy.
Switching to a new home loan is simple. The team at Defence Bank can help you get the ball rolling, and streamline the whole process.
Unlike buying a first home, you won’t need to have a deposit saved. Your new lender will be more interested in how much earn, and seeing how well you’ve managed your old home loan. It’s a great incentive to keep up the good work with your loan repayments.
Next steps.
Is refinancing right for you? Your Defence Bank team can let you know for sure. Call our Contact Centre on 1800 033 139, find a mobile lender or visit your local branch for assistance.
Have any questions? We have the answers. See our FAQs.
Important note: This information is of a general nature and is not intended to be relied on by you as advice in any particular matter. You should contact us at Defence Bank to discuss how this information may apply to your circumstances.
1 https://www.rba.gov.au/statistics/interest-rates/
