When was the last time you had a home loan health check? Here are four reasons why you should investigate the potential benefits of refinancing your home loan today:
1. Secure a better interest rate
One of the main reasons to refinance your home loan is to secure a lower interest rate and reduce your monthly repayments. Whilst your current lender’s rate may have been best at the time, they may not be staying competitive with others in the market now.
At EasyPlan Financial Services we helped one New South Wales client refinance their home loan and saved them $7,096 per annum for five years. That’s a total saving of $35,480 over five years* – the cost of a brand new car, an overseas holiday or a deposit towards an investment property.
2. Access equity in your home
Put simply, equity is the difference between the value of your home and how much you owe the bank. For example, if your home is worth $450,000 and you owe $250,000, you have $200,000 in equity. You can use a portion of this equity as security with the bank and borrow money against it.
Perhaps you’re considering the purchase of an investment property, or maybe you’d like to renovate your home, buy a new car, help the kids with educational costs or go on an overseas holiday. By harnessing the equity in your home you have the opportunity to build additional wealth, achieve a personal goal or help a family member in need.
3. Debt consolidation
Are you struggling to pay ever increasing credit card bills? It may be a good time to consider debt consolidation, i.e. the processing of combining several debts into one loan with a lower interest rate, lower monthly payment or both. Refinancing your home loan can provide you with the opportunity to do this.
Please note, to make the most of debt consolidation, you should reduce expenditure where you can and commit to making additional repayments to pay off the enlarged loan as soon as possible.
4. Access additional home loan features
It’s not just cost savings that you could benefit from. Refinancing could allow you to take advantage of additional home loan features such as flexible rate options, an offset account, a redraw facility and more.
Talk to your mortgage broker about your current circumstances, and anticipated future needs, you might be missing out on some great home loan features simply because you didn’t know about them.
If you would like to compare your home loan to other lenders, and see how much you could save by refinancing, contact us today for you FREE comparison.