Refinancing My Existing Home

Since the abolition of costly home loan exit fees in 2011, refinancing has become a lot easier for homeowners.

When you signed up for your first home loan, it’s more than likely you spent a lot of time deciding on the best loan for your circumstances with the most competitive rate. As the years go by, things change. Whether starting a young family, taking an unexpected direction or downsizing, you might find your home loan no longer suits your needs.

More and more homeowners are reassessing their loans more often and realising there aren’t many benefits to sticking with their current lender. Whether their circumstances have changed or their lender isn’t keeping up with the competition, they’re moving on to secure their future. In many cases, their home loans are costing them money they could otherwise be using to pay their loan off sooner.

There are lots of reasons why you might be thinking about refinancing your home loan, whether it’s to save money on interest and fees, access funds for a renovation project, invest in property, pay for school fees, or consolidate your debts to make managing your finances easier.

How refinancing works

When you refinance, you pay out your current loan with a new loan, often reducing your minimum repayments and your loan term. For example, if you have a $500,000 loan over 25 years and you’ve already paid off $150,000, you can refinance your loan so you’re paying off $350,000 over 20 years. This can free up funds to either put back into your loan or use for other purposes.

There are a range of different loan products available on the market now that might not have been around when you signed your current home loan, so it’s important to assess your loan annually or at least every few years to make sure you’re getting the best deal on the market and the loan best suited to your circumstances.

It’s also a good idea to look at refinancing if you’re coming to the end of a fixed rate period. Not only will you avoid break fees, but you’ll be able to compare home loans and see if you can get a better interest rate or more suitable loan. Whether opting for a fixed rate again or going with a variable or split loan, there are other features to consider including offset accounts, redraw facilities and flexible repayments.

Just remember, when it comes to refinancing it’s important to factor in any fees or costs involved with ending your current loan and starting a new one.

After crunching the numbers, you’ll know for sure if now is the best time to refinance and exactly how much money you can save.

Recommended reading

Refinancing your investment property

When was the last time you checked to see if your investment property loan is still competitive?

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Renovating my home

There's something exciting about taking out a home mortgage and buying a new house.

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How often should you refinance your home loan?

Most home loans are set up for 25 to 30 years. A lot can happen in that time. Your circumstances can be expected to change considerably as you switch jobs, have kids, and experience financial windfalls and setbacks.

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