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Refinancing your Home – How to Ensure a Competitive Loan Rate

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Most, if not all individuals endeavour to secure the best rate available for their home loan, accompanied with all the best inclusions. Some may find out later down the track that the repayments weren’t exactly what they bargained for and the loan wasn’t as flexible as they initially thought. If this situation sounds all too familiar to your own, then it would be beneficial to review your home loan to ensure that you are getting the best deal.

First things first, why and when should you refinance?

If you’re staying up to date with the current market you will notice that the current interest rate has recently dropped to 1.75%. If you find that your lender does not reflect this change with a reduction in their interest rate, you might not be receiving the most competitive rate in the market.

Have a look at our rates and see how they compare.

In some cases, it could be your life situation that changes which would encourage you to think twice about your existing loan and whether it is time to investigate other options. Perhaps you have thought about making an important life decision such as: choosing to invest in a property, renovating your existing home or deciding to start a family. Or maybe life has taken a sudden turn and you will need to have that little bit of extra breathing room. No matter the case, it makes sense to have a loan that is flexible to account for life’s expected and unexpected changes.

If your loan is not flexible, you may need to consider what you’re missing out on. A good lender will offer a 100% offset account facility so that you can reduce the interest payable on the loan and free your finances for other expenses. Another great feature that should consider is a free redraw facility so that you have access to extra funds should there be a need for them.

When not to change

As many reasons as there are to refinance, there are just as many reasons not to and it’s important to know about these before you commit to a decision. For example, if you don’t plan on owning your property for much longer, the high exit penalties and additional set up fees may not be favourable in the short them.

If you have made only interest payments on your existing loan and are thinking about a shorter term loan, you may want to reconsider. A shorter term will generally equate to higher monthly repayments on your loan especially if you haven’t reduced much of the principle amount.

Finally, it would be worth checking your current credit history rating as this could also impact on your eligibility to secure the best rate possible. Some more information can be found here

It’s time to change, now what?

Whether you’ve made the decision to refinance or still sitting on the fence, it’s worth speaking to one of our friendly staff or Financial Advisors to give you a helping hand.

A Financial Advisor will be able to provide a professional assessment on your financial position and discuss whether you are getting the best value from your home loan. Working alongside our staff, they will be able to help you get the right documentation you need for your refinance.

It’s at this stage that your credit history, assets, and financial position will be re-evaluated. Remember to make sure you’re in a good position or are choosing the right loan for your situation. You’ll also need to have your property valued, and in most cases the first valuation is free!

The next steps will be much like your original loan application process and should be reasonably straightforward. Your Finance will be approved / declined, documents will be signed, settlement arranged and then you’ll have your new loan!