How to choose the right refinancing home loan
Home refinance loans are not a one-size-fits-all solution. When looking for the best home loans for refinancing, make sure your refinance options have the following.
Home refinance loans are not a one-size-fits-all solution. When looking for the best home loans for refinancing, make sure your refinance options have the following:
Low interest rates
The ideal home loan refinance is one with low interest rates. This helps not only lower your repayments but also reduce the overall interest cost of your mortgage. If you want to find a low interest home loan refinance, you need to do your research. Get a better idea of the current rates by shopping around and seeing what’s available on the market.
Use an online home loan calculator to compare different home loan refinance offers. This tool can give you a clear estimate of a loan’s total cost making it easier for you to find a refinance option.
Be cautious of home loan refinance deals with ‘honeymoon rates’ or introductory rates. These loans typically have lower-than-average interest rates but for only a set period, changing to an often much higher interest rate after. These loans may sound enticing at first, but you could end up paying more in the long run.
Minimal fees
The ideal loan is one with little to no extra fees. When you apply for a loan, you’ll likely see upfront fees and ongoing costs. Additional mortgage-related expenses typically include application fees, valuation fees, settlement fees, mortgage registration fees, lender’s mortgage insurance, monthly account fees, and annual fees. At first, these fees may seem minimal, but they can rack up quickly.
An easy way to find a home loan refinance with the lowest fees is by looking at the comparison rate. The comparison rate shows the true cost of a loan and is based on the interest rate plus the additional fees and charges included in the loan. By checking the comparison rate, you’ll see if the loan is good value for money.
Take note, some lenders advertise extremely low interest rates on their loans only to have high additional fees. By checking their comparison rate, you can filter these loans out and focus on finding one with a low interest rate and minimal fees.
Useful loan features
To make the most out of your home loan refinance, you need to have good loan features. Home loan features are there to help you save money and manage your loan better. Some loan features are more useful than others depending on your current financial situation. Review your finances carefully to figure out which home loan features should be a priority for your refinance.
A few loan features that can help you maximise savings include a redraw facility and an offset sub-account. Both of these loan features can help you save on interest. A redraw facility allows you to make extra payments to your mortgage and those extra repayments can be taken out of the loan when needed. Meanwhile, a 100% offset sub-account works like a transaction account linked to your mortgage. The amount in your offset sub-account will be subtracted from the amount you currently owe. You can deposit and withdraw from the offset sub-account as you please.
Flexible repayments
You want your home loan refinance to match your financial needs. This means getting a loan that lets you choose a repayment frequency to suit your needs, whether it’s weekly, fortnightly, or monthly. Doing so can help you manage your payments better and stay on top of everything.
Having flexible repayments options can also refer to also refer to how you make your repayments or the payment options for your mortgage. For some, it’s more convenient to have payments taken directly from their own bank accounts, while for others paying through online banking is better. The key is finding a lender that offers the options that are best suited to your situation.
Convenience and accessibility
Being able to apply online and access your home loan refinance anywhere, even while on the go can save you a lot of time. You don’t need to take time off to settle your account in person or wait in line at an office just to sign some paperwork.
Lenders like loans.com.au offer great online tools to make the whole application process and home loan repayments easier and more convenient. For applications, you can use the onTrack app to help you keep track of your home loan refinance with just a click. You’ll also have access to Smart Money app, once your loan settles, so you can manage your loan with ease.
Amiable lender customer support
Customer service isn’t always at the forefront of people’s minds when taking out a home loan refinance. However, the type of customer support a lender offers can greatly impact your overall experience. The quality of customer service could be the difference between a smooth and hassle-free home loan refinance and a slow and frustrating experience.
The ideal lender is one that is easy to reach with lending specialists who take your concerns seriously. No one wants a lender that takes ages to reply or puts you on hold for hours just to get a hold of a representative.
To avoid getting stuck with a subpar customer experience, check a potential lender’s reviews and testimonials. You could also call or set an appointment with the lender beforehand to see firsthand how their processes are.
Find great home loan refinancing offers at loans.com.au!
Check out our range of home loan refinance options! Our friendly lending specialists are here to guide you through every step of the refinancing process, from application to settlement. Call 13 10 90 or apply online today!
Find out in under 2 minutes if you qualify for one of our low rate home loans.
About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
