Blogs | Beyond the Interest Rate: The Power of Refinancing

The RBA cut the cash rate by a quarter of a percentage point this week.  Many of us with mortgages can breath a small sigh of relief - me included!

It is important to keep in mind that refinancing to a lower rate could potentially save you thousands of dollars over the life of your loan. As a mortgage broker, I believe it's crucial to educate homeowners about key strategies to optimise their finances. One particularly powerful tool in your financial arsenal is refinancing.

We recently assisted a client with a mortgage of $800,000 with an interest rate of 6.44% to refinance to a lower rate of 5.99%, here’s what happened:

Monthly Savings: Monthly repayment dropped from approximately $5,000 to $4,800, saving you around $200 per month.

Annual Savings: Over the course of a year, that’s $2,400 in savings.

Lifetime Savings: Over 25 years, my client could save more than $60,000 in interest payments.

Other Benefits of Refinancing

Access Better Features: Many modern loans offer flexible features like offset accounts or redraw facilities that can help you save even more.

Consolidate Debt: Refinancing can also allow you to consolidate high-interest debts (like credit cards) into your home loan at a much lower rate.

Improve Cash Flow: If needed, refinancing can reduce your monthly repayments and free up cash for other financial goals.

Competition amongst lenders is fierce, there are some incredible mortgage deals out there! Lenders are offering attractive rates & flexible features to win your business. Stay informed, shop around, and get expert advice to snag the best mortgage for your needs. Don't settle!

Most lenders will not reach out and offer you better deal – let’s be proactive and compare your rate with other offers in the market.  Contact me directly to discuss in more detail - 0477 712 161