November 22, 2023
There are a number of reasons why borrowers choose to refinance their home loan: from accessing equity to consolidating debt or to simply pay off their loans sooner. I've put together the top four reasons people choose to refinance:
To get a great deal
Do you know the interest rate you’re being charged on your mortgage? Have you stopped to consider how it compares to the interest rate being charged on similar home loan products? With interest rates steadily on the rise, it's an important time to check your home loan to see if your rate is still competitive.
Refinancing your loan could give you access to a more competitive interest rate, especially if you’ve had a home loan for a few years. There are also some great cashback deals available out there, as competitors fight for new business.
Your needs have changed
Your financial products should change as your needs do and your home loan is no exception.
If you’ve had a home loan for a few years now, it’s safe to assume your life has changed in that time. You may have started a new job, received a promotion, or gone through significant life changes such as getting married or had your first child.
Equally, you might be nearing the end of a fixed rate term or interest only period. Refinancing will allow you to ensure your home loan is still in line with your needs and goals.
Pay off your loan faster
Refinancing may put you on the path to paying off your loan faster. As your needs and financial situation change over the years, you might be able to contribute more towards your home loan and get out of debt sooner.
You may also be able to structure your loan and get more out of it by accessing features such as a redraw facility or an offset account. By paying your salary into an offset account, you reduce the interest you pay on your mortgage each month. A redraw facility allows you to access any additional repayments you’ve made on your loan.
Alternatively, you might want to switch into a simpler home loan with fewer features.
To access equity
If you purchased in an area that has experienced home value growth while you’ve been paying down your mortgage, you may have a substantial amount of equity in your home.
Equity is calculated by subtracting the remainder of your mortgage from the market value of your home, usually done through a home evaluation.
You may be able to draw down on your equity to help fund a renovation, or upgrade your home. You may also want to use your equity to help purchase an investment property or guarantee your child’s first home.
Let's explore refinancing your home loan
I offer a free review of your Home Loan to see if refinancing is going to benefit you in the long run. As you can see, there are lots of great reasons to consider a refinance. The good news is: I'll do all the work for you.
Call Mortgage Choice in Coolum Beach on 0409 158 822 or email tom.lipetri@mortgagechoice.com.au to get started.
