For many of us, a home loan is one of the biggest financial commitments we make in our lives. However, it’s also something we can tend to ‘set and forget’. But you could save money by switching your home loan.
Refinancing to a new loan with a more competitive interest rate can not only save thousands of dollars in interest over the life of a loan, but put more money in your pocket on a weekly, fortnightly, or monthly basis. If your property has increased in value, it’s likely to be easier to refinance your home loan to a lower interest rate as lenders favour borrowers with higher equity. Use our refinance calculator to see how much you could save.
Refinancing to save
Getting more money in your pocket is a great motivator for changing home loan providers. Refinancing to a home loan with an interest rate that is a quarter or half a percent lower than what you’re currently on might not seem like a big deal. But even this can mean a substantial reduction in interest repayments over the life of the loan. Use our home loan calculator to work out repayments, calculate stamp duty and estimate borrowing power and savings.
Choosing a new home loan that allows you to make unlimited repayments without any break costs or fees can also help you save even more money by paying off your loan faster. Our Basic Variable Home Loan has no application, settlement or monthly administration fee.
With our Fixed Rate Home Loan, you can lock in your interest rate for between one and five years. You’ll be able to choose how often you make repayments – weekly, fortnightly or monthly – and make extra repayments of up to $10,000 a year to pay off your loan faster.
Other reasons to refinance
While a lower interest rate and low fees are important factors when choosing a new home loan, there are other features that could influence your decision to refinance.
Maybe you’re interested in a redraw facility, allowing you to access extra cash if you’re ahead on repayments. You may also be looking for an offset account that links your loan and your transaction account, to help reduce the interest and time taken to pay off your loan.
If you like the sound of consistent monthly repayments but also the flexibility of variable features, a split loan with a fixed rate for part of your loan and a variable rate for the rest could be for you.
Consolidating debts, such as a credit card or car loan, into your home loan is also a way to simplify your finances.
To find out more about refinancing your home loan get in touch with one of our Home Loan Advisers.