Refinancing in Australia

Interest rates are fairly low in comparison to rates charged in previous years, so refinancing a home loan is a popular decision for many homeowners.

That being said, the market is saturated with hundreds of lenders, each providing different rates as well as varying terms and conditions.

Because of this, it’s important to do your research before applying.

This can be time-consuming, but the good news is that the brokers we work with are knowledgeable about the current market conditions as well as which lenders can offer the best deals.

To help you feel equipped to find the best refinancing rates, we’ve created this handy guide which includes:

If you would like to talk to someone today about refinancing a home loan click here. We’ll only ever put you in touch with a specialist who can provide tailored mortgage advice.

Why do some homeowners refinance?

There are many reasons why someone would want to refinance their current home loan agreement but here are the most common:

  • To increase the amount of loan
  • To get a better interest rate (and therefore pay less over time)
  • Because the lower interest rate on the current loan agreement is about to expire
  • To pay off the loan quicker (by decreasing the repayment agreement period)

Should I refinance my home loan?

Generally speaking, if you’re able to refinance your mortgage with a lender that offers a better interest rate and more favourable terms and conditions, refinancing could save you a lot of money.

Read the table below to see how the rate of interest charged on your home loan could affect your monthly interest payments.

Interest rate examples

Loan amount of $200,000, taken over a repayment agreement of 25 years
Lender Interest Rate as a Percentage Monthly Interest Payments
A 4% $666
B 3% £500
C 2% $334

If you paid an interest rate of 4% over 25 years, your interest payments alone on your mortgage would equate to $199,800.

However, if you switch your home loan agreement with lender B who charges a 3% interest rate, for example, your interest payments would equate to $149,922.
That’s a potential overall saving of $49,878 over 25 years.

Where can I check if refinancing is a good option for me?

That being said, refinancing a home loan is not always the best option for every homeowner and as with any loan, there are always financial risks.

As well as this, applying for a new home loan requires appraisal and application fees, so it’s important to be certain beforehand whether you as the homeowner, can afford to refinance.

If you are unsure, you can seek professional advice here.

Our team can appoint a broker to you who can explain the pros and cons of refinancing and discuss whether it is a viable option for you.

Do I qualify for refinancing?

Whether or not you are eligible for a home loan is entirely dependant on your choice of lender and their appetite to lend to someone with your personal and financial circumstances.

Because the criteria that each lender uses to assess your eligibility can vary so heavily, it can be difficult to establish quickly whether you’ll be accepted for refinancing.

Issues on your application such as bad credit can cause concerns for certain lenders and it may be the case that some are less likely to accept you.

In instances like this and with help finding the best rate in general, a mortgage advisor can be invaluable. They will already know which lenders to approach on your behalf and can quickly identify the best refinancing options for you.

Chat to an advisor here for confidential and professional advice.

How long do I have to wait to refinance my home loan?

Most lenders offer their most competitive rates at the beginning of the mortgage agreement but often the interest rates can increase rapidly after the first few years.

Usually the first port of call when refinancing a home loan is to approach your current lender. However, most won’t refinance a mortgage if they have issued it within the last 120-180 days, so if you’ve only recently taken a mortgage, you may have to shop for a new lender.

How to refinance a home loan

Choosing a home loan that works for you is a balance between getting an affordable monthly interest rate and reducing the overall debt.

To do this, you will need the help of a home loan advisor who understands exactly what you need from your new finance agreement as which lenders are best matched to meet your expectations.

Arrange a valuation for your home

You’ll need to know the current value of your home as well as gather all information regarding your current home loan agreement.

Check your old agreement for penalties

It’s advisable to have a professional look through your agreement and check whether there are any penalties for leaving your contract early.

If there are, your mortgage advisor can calculate this compared to how much you could save with a new lender and will advise you on what would be best for you financially.

Find a new lender

Once you have a good understanding of your current situation and how a new loan could affect you financially, it’s time to compare different lenders.

This can take some time but your advisor will be able to filter out the lenders which are less beneficial for you and those that may be able to offer you a better offer.

Apply for a new home loan

Once they have helped you find the best deal, your advisor can help you apply for your new loan.

You’ll also need to inform your current lender of your decision to refinance, so they can forward all required information to your new loan provider.
A benefit of having a home loan advisor is that they can fill out any paperwork and send them off to the right people on your behalf.

It’s also handy to have another pair of eyes read through your agreement for any terms, conditions or penalties that may be unfavourable.

Settle your old loan

Once you are approved for your new agreement, your new lender will settle your old loan with your previous lender.

Is there a refinance calculator I can use?

We have helped a lot of people who have previously used online calculators and then come to us for an estimation that accurately reflects their circumstances.

A refinancing calculator won’t take into account many factors that will affect your ability to refinance, so often the information you receive can be inaccurate .

To get an accurate understanding of how much you can borrow, the interest rate you can expect to pay and whether you’ll be approved, speak to one of the home loan advisors we work with.

Where to find the best rates for a home loan

With such a huge financial decision to make, you want to be sure that the loan you take out has the best interest rate and is affordable for you.

But with so many lenders to choose from, deciding which home loan company to borrow from can get a little overwhelming.

The home loan advisors we work with have access to hundreds of lenders and can take the time to carefully compare the rates and conditions of each loan agreement.

To find the best interest rate for a remortgage, speak to specialist here.

Top tips to remember when remortgaging

  • Every lender will have their own set of rules and criteria that they use to determine whether they’ll approve you for a home refinancing loan, so even if you have been rejected by one lender, it doesn’t necessarily mean you’ll be rejected by all of them
  • Don’t apply to multiple lenders – this can affect your credit history and leave negative marks against your credit file which can affect your ability to get approved for a new home loan. it’s
  • Speak to one of the expert home loan advisors we work with who can find the lenders who are most likely to approve you

Speak to a refinancing expert

If you have questions about remortgaging and want to speak to an expert for the right advice, make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.