Refinance Your Loan
Refinancing a home loan involves moving your existing mortgage from one lender to another. The key reasons for refinancing are to reduce your interest rate and mortgage repayments.
Refinancing a home loan also allows you to roll multiple debts into a single home loan. This creates the possibility of getting greater interest rate discounts. Refinancing may also free up cash for you to spend on other items.
When refinancing a home loan you must be aware of all associated costs. Refinancing often requires a break fee with your existing lender. Among major banks this tends to be under a $1000 for a standard variable product.
When refinancing a home loan you must way up the costs against the savings over the home loan’s life.
Another cost you must also factor in is mortgage insurance. Mortgage insurance is a cost that may be relevant to you if your LVR is greater than 80%. LVR standards for ‘loan to value ratio’ which is simply your outstanding loan amount as a percentage of the property value. Again, these costs are calculated by our unique system.
Refinancing a fixed interest rate however is more complex than a standard variable loan. To gain an understanding of your true fixed costs we recommend that you speak with one of our mobile bankers who will assist you in understanding your true break costs.
This guide is general information only and is not product advice. If you need advice on your circumstances you should seek professional financial advice.
