When is the best time to refinance?

When is the best time to refinance?

People choose to refinance for many different reasons.

But when is the right time to make the move? And when is it better to stay put?

Let’s start by looking at why people choose to refinance.

Get a lower interest rate

  • With the RBA putting interest rates on hold, many Australians are looking to secure lower interest rates with alternative lenders.
  • Plus, more people are seeking loans from non-major lenders, as they’re often able to provide more flexible and competitive options.
  • Head here for more on the rise of non-major lenders.

Change between fixed and variable rates

  • Knowing your rate will stay the same is undeniably comforting.
  • That’s why many people switch to a fixed rate when interest rates are low.
  • On the flipside, variable home loans tend to be lower than fixed rates. This is what makes them appealing.
  • But if rates rise, yours will too. So there’s a greater risk involved.

Access your equity

  • Accessing equity in a property is another reason to refinance.
  • People often do this when they’re building a property portfolio and have already paid off a property.
  • Others may just want to access funds for other reasons that are important to them.
  • Either way, accessing equity allows you to leverage a valuable asset.

Consolidate your debt

  • Consolidating debt means rolling debt together.
  • If multiple debts are rolled into one debt with a lower interest rate, you’re likely to pay less interest overall.
  • The pitfall is that short-term debts can become long term.
  • So you may end up paying off your debt for longer, which can mean paying more interest overall.

Take advantage of other features

  • There are plenty of ways to improve the effectiveness of your loan, if you know where to look.
  • Many people refinance to take advantage of these features.

Just some examples of extra home loan features include:

  • Having a repayment holiday to help you get through big life changes, like having a baby or finding a new job.
  • Splitting your rate between variable and fixed.
  • Making your loan portable, so you don’t need to spend time and energy arranging a new one if you move home.
  • Establishing a redraw facility, so you can access extra funds in an emergency.

Are you ready to refinance?

  • If you’re not sure whether refinancing is right for you, our mortgage brokers can sit down with you and check the health of your home loan.
  • We assess every facet of your loan to ensure you’re saving as much as possible. Then we offer you solutions, based on what you are seeking to achieve.
  • We have access to hundreds of loans from major and non-major lenders.
  • Our goal is always to discover a home loan that works hard for you and your family.

If you are thinking whether to refinance, talk to a Capita mortgage broker in your area. Or head here for more on the home loan solutions we offer.

Financial Advice Disclaimer: This information is general in nature. Mortgage brokers do not provide financial advice. Clients seeking financial advice will be referred to a qualified financial planner.