Switching lenders is easy and could get you a better deal that will save you thousands over the lifetime of your loan. To get started, consider these five steps to refinancing your home loan with CommBank.
How to refinance your home loan
Before you get started, consider whether refinancing is right for you and what you’re looking for in a new home loan. Do you want a lower interest rate, better features or more flexibility? Are you thinking about accessing the equity in your home to renovate or buy an investment property?
Knowing what features are important to you will help you compare home loans and make sure you find one that suits your needs. Also consider your overall financial situation and what you can afford, as this may have changed since you got your current home loan.
Now is the time to compare home loans to find one that suits your budget and lifestyle.
It’s important to consider more than just the interest rate when you’re refinancing your home loan. Look at all fees and charges associated with the loan, as well as features and add-ons that are important to you and will support your lifestyle and long-term financial goals.
Once you’ve narrowed down your home loan options, it’s time to understand the loan terms. Our lending specialists can talk you through each home loan in detail to make sure you understand what it will cost to refinance your home loan and what your repayments will be on the new home loan. Some of the upfront and ongoing costs may include exit and break fees, start-up fees, new loan establishment fee, settlement fees and government fees and charges.
They’ll also help you work out how much you can save in the long term, compared to your current home loan, as well as give you tips on how to save on your home loan.
Applying for a home loan is easy and can be completed online, in a branch, with a mobile lender or over the phone. In the application process, we’ll assess lending criteria such as income, your mortgage repayment history, other loans and financial commitments.
We may complete a property valuation to work out how much your current home is worth. If your application is approved, you’ll receive a letter of offer and contract for the new home loan. You should talk to your solicitor or conveyancer and read through the contract carefully before signing.
Once you’ve signed the contract for your new home loan, settlement occurs and your new home loan is drawn down. This involves paying off your current home loan using the funds from your new loan.
Your lender will also submit a ‘Discharge of Mortgage’ form to the Land Titles Office in your state or territory to close the old home loan account. You can now focus on making mortgage repayments on your new home loan. The first repayment on your new loan is usually due within a month of settlement, depending on the conditions of your home loan contract.
Remember, refinancing isn’t for everyone, so it’s important to consider your financial situation and whether refinancing is right for you.