Why a loan refinance may be a good idea

There are many reasons why a refinance may be a good idea and it is not just about looking for the lowest interest rate.

Refinancing to get a better interest rate

The main reason for refinance is to get a lower interest rate.

When comparing the interest rates you should also take into account the revert interest rate, application fees, annual fees.

Refinancing to reduce your repayments

Refinancing to access equity in the property to consolidate your debts

Refinancing to change the applicable interest rate: investment to owner occupied

Moving into your investment property

Refinancing if you have enough equity in your own home to use a security for some or all of your investment loan

Take into consideration the costs that are part of a refinance and balance this against the potential interest savings

Compare the fees and charges

  • Fixed Rate Loan ; are there any penalties to end the loan early?

  • Discharge or termination fees from your current lender

  • Application Fee for the new lender

  • Annual Fees for the new lender

  • Switching Fee if you stay with your current lender and just make a change to your current loan

  • Government charges eg mortgage registration fees

Questions to ask as you consider your new lending needs

Loan Term

Principal & Interest vs Interest Only

Fixed Rate vs Variable Rate

Do you need a split loan

Do you need offset accounts

Taking the time at the beginning of the process gives you time to work through your lending requirements for the refinance.