Should you refinance your home loan?
If you’ve had your current home loan for a number of years, it’s likely that your needs have changed. You may have a different financial situation, but your current home loan may not have the range of flexible features and add-ons that are now available on the market.
It’s a good idea to review your home loan from time to time, to make sure it is still helping you achieve your financial goals and has all the features you need.
If you compare home loans and find another loan that better suits your needs, you can refinance your home loan. Refinancing involves paying out your current loan with a new one. It may shorten your loan term and reduce repayments on your loan, so you can afford to make extra mortgage repayments and own your home sooner.
There are a number of reasons you may want to refinance your home loan:
- You may be looking for a better interest rate or new features and add-ons such as flexible repayments, redraw facilities and account splitting
- You may be looking to use the equity in your home to renovate
- If you’re coming to the end of a fixed rate term, it’s a good time to see if you can get a better interest rate or a more flexible home loan
- You may be looking to consolidate debts such as a personal loan, car loan or credit card onto your mortgage, so it’s easier to manage your finances.
Refinancing your home loan may offer potential tax benefits, if you refinance to access equity in your home and use those funds to invest in property, shares or other wealth-building opportunities
When comparing home loans, you should take into account any upfront and ongoing costs associated with exiting your current loan and switching to the new home loan. These may include, settlement fee, loan establishment fee, mortgage registration fee, loan service, and exit fees and charges.