Refinancing Myths: BUSTED

“I’m looking to drag out my home loan and pay more interest than I need”, said no-one ever.

Despite what you might have heard on the rumour mill, refinancing* your mortgage gives you the opportunity to take advantage of competitive rates and secure a better deal than you previously had. Common misconceptions, however, have a way of preventing people from refinancing. To help you out, we’ve busted some common myths to make sure you’re ahead of the game when it comes to refinancing.

‘I would refinance, but the breaking and switching fees will outweigh the savings I’d make. I’m better off just staying put.’

BUSTED: Your new lender may waive joining/establishment fees and offer lower interest rates. While it can seem costly at the outset, chances are that paying the fees associated with changing lenders will be well worth the savings your new loan could bring. By doing your research and understanding what fees you’ll incur (or putting your broker to work), you’ll be better placed to choose the right deal for you, and might find that the fees are not as scary as you imagined.

Refinancing is so time-consuming and complicated. I just don’t have the energy to spend weeks comparing complex rates and calculating fees.’

BUSTED: Looking around for deals that are suitable for you is crucial, but it doesn’t need to be time-consuming, nor tedious. Most importantly, you do not have to do it on your own. Shopping around for lenders is well within the capacity of a mortgage broker, who will also be happy help you find the right loan and take care of the paperwork for you. Generally speaking, you’ll need to provide your payslips, loan statements and an estimate of what you can pay each month.

‘I know I’m spending too much but I just don’t know where to start, nor who can help me. I don’t know all that much about finance or negotiating with lenders, I just can’t afford to pay a broker.’

BUSTED: You may well be spending too much, but here’s the good news: you don’t actually have to pay a mortgage broker to help you navigate this process. A mortgage broker is simply a middle-man between the borrower and the lender, who negotiates the loan on your behalf. They will do the legwork including the admin (yay) and researching of products, and will continue to support you throughout the application and settlement process. While they do earn a commission from lenders, a broker must adhere to a range of legislative and regulatory requirements to ensure your financial interests are their first priority. What’s more, it’s almost certain that a broker’s professional knowledge of the industry and available lenders will allow you to find the right deal and negotiate more effectively.

Refinancing is by no means a magic wand that waves away debt and mortgage stress in a poof of glitter. It can, however, be an excellent way to save in the long-run. Don’t hesitate to contact a if you’re thinking of refinancing, they will be happy to help you navigate the maze of options and let you know whether your current loan is still suitable, or if there are better options out there. You literally have nothing to lose, but interest repayments!

*Refinancing is subject to various lender imposed terms and conditions including but not limited to loan serviceability, valuations and confirmed capacity to service both any existing and revised lending arrangements


As with any financial scenario there are risks involved. This information provides an overview or summary only and it should not be considered a comprehensive analysis. You should before acting in reliance upon this information seek independent professional lending or taxation advice as appropriate specific to your objectives, financial circumstances or needs.