With the official cash rate still at an historic low of 1.5%, and some lenders offering home loans at interest rates below four per cent, now is a good time to speak with a mortgage broker about refinancing your home loan.
There are many reasons to refinance in the current climate, with the advantages varying according to your individual situation, needs and the level of equity you have in your home and investment properties. Or, you may simply not be happy with your existing lenders service!
If you are considering refinancing, here are just some of the reasons you should look into the current opportunities in the market.
1. Lower Interest Rates
Switching to a lender offering a lower interest rate than your current lender can lead to a significant reduction in your repayments.
You can choose to add the extra money to the household budget or keep paying the same amount each month in order to reduce your mortgage more quickly.
2. Extract The Equity In Your Home
If you have equity in your home or other properties, either from paying down your mortgage balance or the value of your property having risen, you can use refinancing to release some of this in the form of a line of credit or a standard home loan for a range of purposes.
Some reasons to do this include:
- Using the equity as the deposit on an investment property
- Funding renovations to your home
- Adding an extension to your home
- Consolidating your debts
- Paying for an extended holiday
- Paying for your children’s private school fees or higher education
- Helping an adult child with the deposit for their own home
3. Gain Extra Features
With refinancing, you can also seek out a loan with a feature upgrade such as an offset account. Used wisely, an offset account can help you pay off your home loan sooner.
Should you need the money in the future for any of the purposes in the previous list then it will be ready. Just be cautious and don’t blow the money. Facilities such as offset accounts and lines of credit are very useful but take careful financial management.
4. Unhappy With Your Existing Lender
Some people choose to refinance simply because they are unhappy with their current lenders service and just want to show them the door. If this is the case, then it’s a good time to take a stand and walk away from them!
As with any financial decision it’s worth getting advice about your particular situation and chatting to a broker so that a bespoke solution can be put together for you.
To chat to an Online Home Loans broker, call us on 1300 135 456, web chat or fill in the Contact Us form and we’ll call you back.