There are many reasons that you may choose to refinance your home: Finding a better interest rate, consolidating your debt so it’s all in one place or drawing some extra cash from your home equity.
Switching to a lower interest rate can reduce your monthly home loan repayments and the time it takes to pay off your loan. There can be unexpected costs, so make sure you weigh up the expense against the potential savings.
Switching to a loan that meets your needs. The best home loan for you yesterday may not be the best home loan today. You may want the security of a fixed rate home loan, or the lower interest rate of a variable rate home loan. Maybe you’d like to explore the possibility of a redraw facility, an offset account or the convenience of loan portability. Your home loan should be working for you, not the other way around!
Consolidating your debt is great if you have more than one loan. By combining several smaller high-interest loans into one low-interest loan, not only are you paying everything off at once but you may also reduce your monthly repayments, saving you money.
Drawing on your home equity gives you the opportunity to achieve some personal goals – anything from investing to taking a holiday. Home equity is the difference between what you owe on your mortgage and the value of your home, so if you’ve been making repayments for a few years, you probably have quite a lot of home equity to draw from.