There has been a lot of media and hype recently about refinancing your home loan and 'getting a better deal'.
If you are looking to refinance the first question I would ask is “why”. What do you want to achieve by refinancing?
If you are just looking to get a better rate and have no real needs in the future, ie you are looking to refinance a $250,000 to another $250,000 – you need to ask yourself if you are going to get any real benefit from doing so.
You could save yourself 0.25% to 0.5% on your interest rate but you have to consider the costs in doing so.
Firstly, know the loan you have, are you using all the benefits of your loan, or are you paying for something you are not using.
Secondly, find out what the total costs will be before committing to the new loan. We always disclose all lender fees and government charges when refinancing, so you can make an informed decision whether or not refinancing is right for you.
Lastly, work out the savings – and do the savings out weigh the costs? If they do then it maybe worthwhile.
If you have personal loans or credit card debt that you want to roll into your home loan. This could save you thousands and we should talk.
A great rule of thumb is to have the majority of your debt at the lowest interest rate possible, this is normally your home loan.
For an honest unbiased view please contact me.