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Is it time to refinance your home loan?

09 May 2017

Is it time to refinance your home loan?

Whilst Australia’s current interest rates are low it is certainly worth reviewing your home loan each year.

Refinancing is the action you take in replacing your existing home loan with a new product that results in a cost-effective and flexible outcome. This involves switching to a new product with your current provider and may result in consulting with a different lender.

So why would you consider refinancing?

Pay less

Our DHOAS Home Loans give you the flexibility to choose the loan type and repayment frequency according to your needs. If you’re not eligible for a DHOAS home loan, it is also worth researching our standard Home Loan products that offer low rates to our members.

Lower interest rates = less repayments. This means you can save more! Even the slightest reduction of a 0.5% interest rate could save you tens of thousands of dollars in the long-term.

Consolidate your debt

Bringing your multiple debts together with your home loan allows you to take advantage of the interest rate. Home loan rates are known to be generally lower than other forms of borrowing.

Shorten your loan term

Take advantage of when the rates drop. You’ll be able to reduce the period of your loan and realise the difference of cutting down 5 years of repayments.

Get a better deal

Choose from converting to a fixed, variable or split-rate interest loan to provide more flexibility and/or security.

Access better features

Consider benefits such as unlimited additional repayments, redraw facilities, linking an offset account or tapping into your home equity. These features will ultimately save you money and allow you to have flexibility around your product.

Now, these advantages look great for the long run. However, there are a few things you will need to consider...

Firstly, narrow down your goal and specify exactly what you want from refinancing your home loan. This will make it easier for you to research products by identifying the benefits and features you will need to achieve your goal.

Secondly, don’t let the long-term saving goal blind you. There will be upfront costs such as discharge fees, registration of mortgage fees and break costs, stamp duty and LMI (if borrowing more than 80% of the property), establishment fees, legal fees and valuation fees. However, check with your current lender to see if they are willing to renegotiate their deal with you.

Also, be sure to note any drastic changes to your personal situation. To refinance, you must reapply. Meaning, the lender will look into your employment situation, additional debts or an increase in number of dependants.

Are you interested in refinancing your Home Loan?

Visit us in branch and talk to our lending specialists. Alternatively, you can call us on 1300 13 23 28 to help you navigate through the home loan refinancing process.

 

 

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