Reasons to Refinance a Mortgage

There are so many different reasons that people look to refinance a mortgage and chances are, it’s related to either unlocking equity, getting a better interest rate or changing to either a fixed or variable rate to suit your changing needs.

Read on for more detail on the main reasons you should refinance your mortgage.

Get a Better Interest Rate on your Home Loan

Getting a better deal on your home loan can lead to big savings on interest payments so it pays to shop around.

Just make sure you check the costs involved as this can in some cases outweigh the benefits.

Got Debt Left, Right and Centre? Consolidate and Save!

If you have multiple debts for example:

  • a home loan
  • car loan
  • credit card debts and
  • personal loans

consolidating these loans by refinancing your mortgage can reduce your monthly repayments (compared to paying each debt individually) and also the interest paid as your home loan interest rate will be lower than the interest rate on other debts.

How does consolidating debt save you money?

Think about how much your interest rate is on your credit card compared to your home loan. By pooling your debit into the one loan you’ll be paying all your debts at the one lower interest rate.

Just make sure you are paying more than the minimum to cover the costs of the debts that have been added to your home loan.

Money Getting in the Way of Your Lifestyle?

While we do our best to plan our finances so that we don’t find ourselves in a sticky situation, sometimes life just get’s in the way. These situations may include:

  • A wedding
  • Expecting a baby or new addition to the family
  • Kids have left the nest
  • Planning your retirement

Refinancing to accommodate for lifestyle changes like these can really help to ease the pressure on the purse strings. After all, what’s the worth of money if it doesn’t allow you the lifestyle you want?

Pay Down Your Mortgage Sooner

If you’re looking to pay off your mortgage sooner rather than later, reducing the term of your loan (the number of years you have to pay it off) is a sure fire way to make it happen.

Why This Works

Reducing the number of years you have to pay off the debt means your minimum repayments will be higher based on the number of years the loan is spread over, resulting in you paying it off sooner and also reducing the amount of interest paid.

Just make sure you can comfortably handle the increased repayments before jumping in.

Converting to a Fixed Rate Home Loan

There are many reasons you may be thinking of fixing the rate of your home loan, the main motivator is usually rising interest rates and changes in lifestyle like having a partner on maternity leave.

By fixing your rate you’ll have piece of mind knowing that your payments won’t change and you can budget accurately.

Things to Consider

  • With a fixed rate package you’ll could pay more than your current interest rate
  • If your situation changes within the fixed period it can be very costly to get out of it
  • Perhaps look at fixing the rate only for a set amount of time

Making the decision to fix you rate can be difficult but, it really boils down to researching your options and going with the option that makes you the most at ease.

Converting to a Variable Rate Home Loan

If you’ve been on a fixed interest rate and your situation has changed, it may be a good idea to switch to a variable rate. One of the best reasons to switch over to a variable rate is when the rates have dropped and you can get a much better deal, potentially saving you loads of cash.

This all depends of course on your individual situation and how comfortable you are knowing that your payments will fluctuate with rate changes.

Unlocking Cash for Renos or Extensions

Looking to upgrade your home with a renovation or extension? If your property has increased in value since you purchased it you may be able to unlock the equity to give you the cash you need to spruce up your home.

Getting Access to Cash For Purchases

Always dreamed of buying a boat? If the value of your property has increase since you purchased it, you may be able to unlock the equity built up. This equity can fund purchases including the boat you’ve always dreamed of owning, a new car or perhaps a holiday?

Funding an Investment Property Deposit

One of the best ways to get into property investment by using the equity in your existing property to fund the deposit towards your investment.

Using the equity in your home means you don’t have to struggle to save for the deposit like you had to for your first home meaning you can get into the market much quicker.

Request A Call Back Now to See How You Could Get a Better Deal

If you still want more information, request a call back now so we can assess your situation and chat to you about your options. All you need to do is fill out a few basic details so we can give you informed answers and simply selected your preferred contact time and we’ll call you back!

Ready To Fast Track Your Home Loan?

If you’re ready to apply for an obligation free online pre-approval then simply complete the 3 step online application form, select a time that suits you and we’ll call you with details of your pre-approval. It’s that simple.