Four Reasons to Think About Refinancing
May 26th 2023At the time of writing this, there is a lot of uncertainty out there in terms of future interest rate rises and the general economic conditions. It’s therefore very tempting (and potentially warranted) to review your current home loan.
Here are 4 reasons why we think you might want to look into it:
1. Lower interest rate
A lower interest rate could not only save you money, but it could also help you pay off your home loan sooner. When your interest rate is less, you have leftover in your pocket each month! You could even use some of the saved funds to make additional mortgage repayments and even further speed up the repayment process.
2. Add features such as an offset account, redrawing facilities etc
A loan home lasts a long time (25-30 years generally!) so it’s not uncommon that your needs will change over the loan term. You might be interested in additional features designed to offer greater flexibility and interest savings, such as an offset/redraw account, the ability to make extra payments or even additional features such credit card facilities etc.
3. Access equity
When property prices increase and/or your home loan balance decrease over time, your equity position gets better.
A cash-out refinance allows you to use the “equity” you have in your home to borrow money potentially at a lower cost. These funds could be used for purchasing another home, investing into shares or other personal uses depending on your goals and circumstances.
4. Cash refinance bonuses
When you refinance there is often some costs involved such as application and discharge fees. Banks often offer cash bonus when refinancing your home loan to them. This helps to cover some of the upfront costs and hopefully there’s a little bonus left on top for all of your hard work!
