Benefits of Refinancing
There are plenty of benefits available to people open to the possibility of refinancing their home loan, so this is definitely not an option to discount.
Here are three examples of how refinancing your home loan might benefit you, both in the short term and in the long run.
Secure a better interest rate
Refinancing your home loan can be a great way to secure a better interest rate, ensuring that you will spend less money over time and, hopefully, pay off your mortgage faster. Right now, the Official Cash Rate is at a record low 2.5 per cent, so this is definitely something to keep in mind.
You can also refinance in order to secure a loan that better meets your lifestyle requirements. You might swap from fixed to floating, or vice versa, or even change the repayment frequency of your loan to a more suitable option.
Free up some extra cash
Do you have a new baby on the way and need to free up some equity in order to renovate the nursery? Maybe you are planning a big upcoming wedding or holiday? Perhaps a great investment opportunity has opened up and you need money to get on board?
Refinancing is a great way to secure a bit of extra cash to put towards something that is really important to you.
Consolidate your debts
Finally, refinancing can also be a good technique for consolidating multiple debts, in order to make it easier to keep on top of ongoing payments and reduce the number of late fines or high interest rates that you incur.
For example, say you and your partner had a home loan, a personal loan which you took out for a new car, and payments owing on credit cards. You could refinance your home loan and consolidate all those debts into one easy to manage package and tie it to one interest rate.