Whether you’ve had your loan for a number of years and your needs have changed, or you just have a sneaking feeling you could get a better deal, a mortgage refinance might be right for you.
What does refinancing mean?
To refinance simply means to replace or restructure your mortgage with a different lender. In layman’s terms, it means to switch your home loan from one lender to another.
How easy is it to refinance?
Sam & Kate Brown, of Vaucluse, were unhappy with their lender, and decided to make the switch and refinance in 2016. The couple wanted a better deal, and after realising they weren’t going to get any movement from their lender, acted upon a recommendation of Sam’s colleagues to shop around.
“Once our application was approved, all we needed to do was sign the loan agreements and mortgage documents, which were brought to us personally, and then the bank went and arranged settlement.” said Sam.
“Dollar for dollar, our refinancing has been a better outcome for us, because we now get a lower interest rate than was offered to us by our previous bank.”
Refinancing – When does it make sense?
If you’re considering a refinance home loan, be sure to consider both your reasons and the timing of your decision before you act.
A refinance may make sense:
- If your current lender isn’t willing to offer a rate competitive with the market,
- If you’ve experienced recent major changes to your financial situation,
- If you’re after extra money to finance things like a renovation, your kids’ education or a property investment,
- You want to take advantage of a low fixed home loan rate by locking it in.
A refinance may not make as much sense, however:
- If you don’t plan to be in your current property much longer,
- If your current home loan will hit you with high prepayment fees upon exit,
- If your credit history has taken a bettering since your last loan,
- If your income stream will be sporadic over the period of the loan.
Beyond this, it’s important to consider your motivations for refinancing. Sure, we all want the most competitive rate we can get, but over the life of your loan, beyond the headline interest rate, be sure you’re comfortable with your new lender. Look for great service, such as that provided by Greater Bank's mobile lender fleet.
If you’re looking to make the switch, take advantage of Greater Bank’s refinance calculator suite: