When should you switch home loans?

When should you switch home loans?
There are many reasons why you may want to switch your home loan. We’ll discuss how to transfer your home loan and the cost of switching home loans.
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There are many reasons why you may want to switch your home loan.

We’ll discuss some of those and explain how to transfer your home loan and the cost of switching home loans.

1. Your interest rate isn’t competitive

Interest rates are at historic lows but they won’t always be this low. If you haven’t already refinanced, now is the time to do so. Refinancing for a lower rate will not only save you money but it could also help you pay off your home loan sooner. A lower interest rate also means your repayments will be lower every month, which puts more cash back in your pocket.

At loans.com.au we offer competitive interest rates on both fixed and variable loans. You could save thousands on your mortgage by switching to our low-interest rate home loans.

2. You want to consolidate debt

If you’re finding it difficult to manage your personal debt repayments, some lenders will allow you to consolidate your debts into your mortgage. Consolidating all your debt into your home loan can make your debt repayments more manageable and allow you to pay them down quicker.

3. You want to fund a home renovation

Home renovations can be costly, which is why many people choose to refinance their home loan to tap into their equity. To access the equity, you'll refinance with a new or existing lender and increase the amount you owe to the lender, to gain the renovation capital. Find out more about refinancing to fund your renovation.

4. You want more features in your loan

Maybe you’ve decided you want the ability to make more repayments or an offset account. If your current lender doesn’t offer these, it may be time to switch to a lender that does.

At loans.com.au ouoffset sub-account is 100% offset. This means we take into account all of your money in your offset sub-account when we calculate your benefit, which not all lenders do.

5. You want to access equity

Perhaps you want to buy an investment property and need to access the equity you’ve built up in your home. Refinancing your home loan allows you to tap into the equity you’ve built up and put it towards a deposit.

6. Your fixed rate term is coming to an end

If you are currently on a fixed rate home loan which is about to come to an end and the revert rate isn’t competitive, it may be time to think about refinancing to a different loan with a more competitive interest rate.

7. You want a fixed rate mortgage

There are plenty of attractive low rate fixed home loans on the market right now, including our own 1.99% p.a. three year fixed rate (2.70% p.a. comparison rate).

If you want to lock in a low rate for a few years, it may be time to have a think about refinancing to a fixed rate mortgage.

How to transfer your home loan

When refinancing it’s important to compare the cost of switching home loans. You can check what the average interest rate is and compare that to your own to see how your mortgage compares.

Compare the fees and charges that come with refinancing, such as break costs, application fees, switching fees, discharge fees and stamp duty costs, as you may be liable for that when you refinance.

Once you have narrowed down a short list of potential loans you’d like to switch to, use our mortgage switching calculator to work out how much you could potentially save be refinancing.

At loans.com.au we use a fast process to refinance your home loan called FastTrax Refi.

FastTrax Refi allows you to pay out your lender quickly. You don’t even have to contact your old lender - we do the hard work for you. You simply apply online and talk to a lending specialist, upload your documents and that’s it!

From the time you return the completed mortgage documents and Loan Agreement to us, it only takes days to make the switch.

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Tags: guide to switching home loans | mortgage refinance | refinancing your home loan

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