A guide to refinancing your home loan

• Refinancing your home loan can offer a range of benefits including a better home loan rate or freeing up extra cash.
• There are many reasons to refinance, including consolidating debt or getting better home loan features.
• Be sure to check ahead for any break or discharge fees on your current home loan you might be required to pay.

New to refinancing? Refinancing your home loans means changing your current loan for a new one and most commonly, this also means switching banks or lenders too.

Refinancing your loan offers a range of benefits from a lower home loan rate, to better loan features that can help you get ahead financially or use your properties equity to free up extra cash.

A lot of us can get easily stuck in the ‘set and forget’ trap when it comes to our home loans. Because they are generally 30 years long and we’ve gone through the trouble to get approved for the loan when buying the property, it can be easy to think your bank is doing all the work for you.

But taking the time to track interest rates and loan options that all banks are offering and refinancing when your bank is underperforming or when your loan type no longer benefits you is worth the effort and time to shops around to ensure you’re getting the best deal possible.

Why should I Refinance?

Refinancing your current home loan opens up a range of financial benefits and the reasons for refinancing can include:

You’re after a better home loan rate

If your current home loan rate doesn’t reflect the current market conditions or are close to the rates set by the RBA (Reserve Bank of Australia), getting a better deal can be done by refinancing with your current bank or with a new lender.

Shop around with banks and lenders and compare their home loan rates to ensure you’re getting the best one possible.

You want better loan features

Looking to set up a redraw or offset facilities to maximize your home loan? Refinancing your loan will enable you to change your current loan structure and make it work better and smarter for you.

Alot of banks offer home loans with a wide range of features that you can utalise to make your finances work better for you.

Free up extra cash

Refinancing could be right if you’re looking to undertake renovations, buy a new car or make a large purchase in the near future.

Refinancing your current home loan could allow you to access your existing home equity and provide you with access to that extra cash without taking out additional loans.

Streamline and consolidate your debts

If you’re in need of simplifying your money management, refinancing your loan to consolidate your existing debts into a single low rate home loan could be ideal and an easy way to keep on top of any mounting debt.

You want to change your current bank or lender

Switching up your current bank or lender to a new one could open up opportunities to get new features on your loan or bundle it with the new banks’ offers and services. Don’t be loyal to a bnk because you’ve been with them for many years. It can cost you a better home loan rate or better features that can help you set your financials better.

Related: 3 ways to revolutionise your financial health

Next steps

It’s important to review your current loan and shop around to see what benefits refinancing can do for you.

Don’t get trapped in a set and forget mentality and don’t stay loyal to your bank if your loan is underperforming and your loan type doesn’t work for our ever-changing life situations. The effort can bring great benefits and can help set your finances work better.

If you have any questions, don’t hesitate to comment below or reach out to us on our Facebook page.