Cash rate stability, increased product choice and low interest rates have created the prime environment for consumers planning on a mortgage refinance of their home loan. Competition in the mortgage market is at an all time high.
Major lenders are slashing rates and releasing some enticing mortgage products in a bid to win over your business. As the banks continue to battle over market share, an increasing number of borrowers are realising the potential savings on offer should they decide to make the switch to a new lender
The mortgage you have now may no longer be the most appropriate or most affordable option available. If you are unable to remember the last time you had a credit check, now could be the time to do so. Whether you are looking to drive down your mortgage balance or reduce your repayments, refinancing may be the ideal strategy.
The benefits of a mortgage refinance
Find a better interest rate, bank competition, coupled with interest rate stability, has created some real opportunities for borrowers. Refinancing your mortgage to a fixed rate product will give you certainty around loan repayments. However, you should also consider break costs which may apply if you break your term early.
Unlock the equity in your home, investors can use a mortgage refinance as an effective way to unlock the equity in their home, giving them more funds to act sooner. It is also a terrific way to gain some extra cash when renovating your home.
Debt consolidation, finding it difficult to keep track of all your debts? Refinancing can place all your debts, including store and credit cards, into one loan. This will help you manage your debt more effectively and potentially save you thousands in interest rate repayments.
Which option is best for you, even staying with you current loan, will depend on your circumstances.
While the federal government abolished exit fees for new loans in 2012, there are some extra costs that you will need to consider before changing lender. Moving home loans can carry other costs such as new application fees, legal fees and mortgage insurance.
However, establishing which home loan best fits your needs can be quick and relatively stress free. A mortgage broker can help make sure the transition from one home loan to another is as safe and hassle free as possible.
Moreover, they can work with you to identify the most appropriate product to meet your needs as well as help you through the application process if a mortgage refinance is appropriate for you.