More and more people have chosen to refinance their home loans since interest rates are lower and there are more competitive deals available.
Refinance just makes sense for those who want to secure a lower interest rate, some savings brought on by reduced loan repayments, better flexibility in their home loan product with offers of redraw facilities and an offset account, time reduction on their home loan, and access to the equity in their loan to finance such expense possibilities as a renovation, a new car, or a backyard pool.
In case your situation has changed, you may want to look into refinancing your home loan. What are some instances in which this makes a very viable option? Home loan refinancing is something you should consider if you want to invest in another property. Other possible contexts include anticipation of a new baby, a desire to consolidate your personal loan debts and credit card, and a move to get a different interest rate, especially if your current one is locked-in above the market value.
Before you commit to refinancing your home loan, you should definitely first perform a financial health check.
Some of the points you may want to look into are the adequacy of your current lender or credit provider (can they continue to meet your needs?), the certainty of your monthly repayments (should you fix your home loan to achieve this?), your preference regarding interest rates (would a combination of both fixed and variable be better?), capacity to save money (will refinancing enable this?), impact of costs that come with refinancing (will they set you back?), the manageability of your personal and household budget (will refinancing help in this area?), etc. At the very least, doing a financial health check will determine if you have sound reason to go for refinancing and if the long-term benefits outweigh the initial costs.
Indeed, refinancing can really serve you well, provided you do it correctly and for the right reasons. Once you’ve decided to opt for refinancing, you can go to an expert for professional advice and guidance. A finance broker, for instance, would be able to do a comparative study of interest rates and make educated predictions on long-term savings.
Lots of people are doing it, but refinancing is not always the best option for every case.
You need to do your due diligence, analyze and compare so you can have a good idea of what the consequences of such a move would be for you.
