As Hamish and Dave outline, the process of refinancing can save individuals thousands of dollars in their mortgage repayments, and give them more financial freedom to do what they wish to do. This article will cover the different ways refinancing can help save you money and the other benefits it provides home loan customers, ultimately answering why should you refinance your mortgage.
Why Should I Refinance My Mortgage: Save Money
Refinancing is when you change your debt obligation to another with different terms. These could include the rate, repayment period or something different. The most common reason for why people refinance is for a reduction in interest rates. As Hamish and Dave discuss above, a reduction in an interest rate by 1.3% is not uncommon. Over the course of a standard mortgage, this can lead to thousands of dollars in savings. You can see what savings you can achieve with an interest rate reduction using our calculators. If you would like to see what other rates are on the market, Vision Property and Finance and our team of refinancing experts can help you out. Simply get in touch with us using our live webchat, or book in a free consultation here.
Why Should I Refinance My Mortgage: Switch Between Rate Types
Another reason you should refinance your mortgage is if you are looking to switch the type of rate you are paying. This could be from a variable rate to a fixed rate or vice-versa. A fixed-rate loan allows you to choose a loan that will have a set interest rate and repayment that will not change for a certain amount of years. A variable rate loan changes its interest rates alongside market conditions. Each of these rate types comes with its own set of pros and cons, with more information on them here. If you’re not happy with your type of loan, switch it today!
Why Should I Refinance My Mortgage: Ability to Utilise Home Equity
Through refinancing your mortgage, you could be able to access your home equity for an investment property, a renovation or other wealth-building activities, as Hamish and Dave discuss below:
Consolidation of Debt
If you have multiple debts, including car loans, business loans or credit card loans, consolidating debt through a mortgage refinance may be a way to streamline your repayments and reduce your overall interest and administrative costs. Whilst this can save money, factors such as the lengths of the terms of debts being consolidated need to be accounted for. It is best to speak to an expert about how to best go about doing this.
Access to Loan Features
Refinancing debt can get you access to a range of loan features that your current lender may not offer. These can include:
- Redraw Facility – ability to redraw payments already made on a loan in case of an emergency
- Flexible Rate Options – allocating variable and fixed rates for parts of your mortgage, and potentially interest-only payments
- Repayment Holidays – lenders allowing breaks or a reduction in repayments to provide more financial freedom with career changes or breaks
… and many others!
If you are looking to refinance your mortgage to save money, switch loan types, consolidate your debt or to access new loan features, Vision is here to help. Get in touch with us using our live chat, or book in for a free appointment with one of our refinancing experts here.