February 07, 2018 by Marcela Pidcock
When Would I Refinance My Mortgage?
The answer is simply whenever it makes financial sense to do so.
Have you heard about mortgage refinancing?
In the past, our parents would take out a mortgage and stay with the bank until it was fully paid off. Back then, change was scary and information about options was limited. These days, people refinance their mortgage much more frequently. The average duration of a home loan in Australia now is just 4-5 years. Here, we look at some of the reasons people in Australia refinance their home loan.
Lower interest rates
The most common reason for people to refinance their mortgage is to get a better deal, especially when interest rates are at their lowest. However, please don’t become interest rate-fixated. When you refinance your home loan, you need to consider fees and charges as well as the interest rate. You often have to pay charges for exiting your current home loan, plus charges for taking out the new mortgage. It is essential that when refinancing your home loan that you will be better off in the long run after taking into account all costs.
More flexibility
Many people only discover the full details about their mortgage when it is too late. They try to do something and get told by their lender that either they can’t do it, or they will incur a hefty charge if they do.
Home equity
Over recent years in the property market, houses have appreciated at a significant rate, e.g. a home you bought for $300,000 five years ago, might now be worth $700,000. Refinancing your mortgage with a home equity loan might let you tap into that extra $400,000 equity.
The key to refinance is to know your numbers and having your trusted Mortgage Choice Broker provide you with options and the information required for you to make the right decision for you.
‘Want to find out more about refinancing your mortgage and whether it is right for you?
Then, call us today for expert advice - Mortgage Choice Chatswood 1