| Refinancing means a borrower takes out a new loan to pay out an old loan. You can refinance with your existing lender to restructure your debts to suit your situation, enhance the tax deductibility of your loan portfolio or use equity to purchase a new property. Refinancing also gives you the opportunity to renegotiate your interest rate with your current lender or any one of the other lenders on our panel.
Refinance to Save – Even a small reduction in your mortgage interest rate can significantly lower your overall repayments. So refinancing to reduce your interest rate is the first simple way to help you save. This effectively reduces your monthly repayments. It’s a great idea in most cases. You can also change the term on your mortgage to lower your monthly repayments, e.g. increasing from a 20 to a 30 year term can significantly reduce your mortgage repayments, which could be particularly appealing when you are saving for a holiday, looking to buy a car, or are simply experiencing a temporary reduction in disposable income.
By switching from principal and interest home loan to an interest only home loan, the same effect can be achieved. Though your monthly repayments are hence lowered, it is only an adequate short-term solution only, as principal repayments need to be made in order to reduce your mortgage.
You can also save a surprising amount by altering the pattern of your mortgage repayments i.e. switching from a monthly mortgage repayment to a fortnightly one, as the consequence of making more frequent repayments is that your mortgage interest is calculated on a smaller balance each repayment period.
Refinance to Access Cash – The equity in your home can be thought of as a savings account which you can access through re-draws. Do you want to finance doing some home improvements or pay off a high credit card debt?
Refinance to Consolidate debts - See ‘Consolidate Debts’.
Refinance for a change between a Variable & Fixed Rate Home Loan
You may find that the current variable interest rate is either lower or higher than your already fixed rate, and a switch could help you save!
Refinance For Flexibility
Perhaps your mortgage is now ‘out-dated’ and does not offer you the features and flexibility that a home loan can have, for example:
- loan portability;
- loan offset accounts;
- multiple transaction accounts linked to your home loan;
- split loan facility etc.
A home loan that has these features can help you achieve great savings in the long run. Would you like to find out how you can refinance your debt and save money? - SEE A BROKER
There are numerous ways to structure your home loan, with choices of fixed rates, variable rates, off-set accounts etc... check out the different LOAN STRUCTURES. |