amended by Craig McDonald 07.06.2025
Whenever it makes financial sense to do so.
Have you heard other people talking about refinancing?? Previously home owners stuck it out with their original loan provider but these days, its common to be to switch lenders and get the best deal for yourself. The average duration of a home loan in Australia now is just 4-5 years. Here we look at some of the reasons people might look to start refinancing their home loan.
Mortgage refinancing reasons: lower rate = lower repayment
The biggest reason to refinance is to save yourself money, a lower interest rate will normally mean a lower repayment if you stick on the same loan term. But the lowest rate is not always the best option and its important to do the research on the lenders product you are switching to.. When you refinance your home loan, you need to consider fees and charges as well as the interest rate. You need to weigh up not just the interest rate but all the switching costs involved in changes lenders. A good mortgage broker should advise you on the costs involved in moving so you can then make an informed decision before starting the process. For our dedicated refinancing page please click here
Mortgage refinancing reasons: more flexibility = more lender options
Its important that you look for specific product options that are important to you when you start the refinancing process. If an offset account is important then you should ensure your broker has taken note of that as basic loans normally only come with redraw and not with the offset option. Other important features could be redraw, parental leave if construction or renovations are in your long term plans, that the lender you choose will cater for that as some do not. For more information on offset options read our blog post here
Mortgage refinancing reasons: renovation or construction
Are you considering a renovation project or construction? then getting your ducks in a row early is important. You want to make sure you can finance the project and funds required so a pre-approval is important but also picking the right lender for construction is important as you don’t want to refinance to a new lender then find out renovations loans are not possible and have to switch again. To find out more on renovations loans click here
Mortgage refinancing reasons: home equity and taking funds out your property
With the increase in property prices across Australia over the past 10 years, many owners have built up equity in their home and they want to start leveraging off that. This could be in a few different ways but the most common use is to purchase an investment property. If you are looking to get a pre-approval for an investment property then its a perfect time to have your current lending portfolio reviewed by a trusted mortgage broker. For more information on pre-approvals read our blog post here
Mortgage refinancing reasons: to improve your borrowing capacity
Every lender uses a different formula to calculate your borrowing capacity and they have different policies on types of income or bonuses and what might work with one bank might work with another. For that reason its important to look at different lenders and how your borrowing capacity is across different lenders. It’s important to know that their are options out their to assist with your own situation and a good mortgage broker can help show you those.
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