Top 5 benefits of mortgage refinancing
There’s no reason to pay more for a product that you could buy for less – the same logic applies to mortgage refinancing. One of the biggest (and priciest!) decisions you’ll make in your life is buying your home. Mortgage refinancing is all about making sure you’re not overpaying and that you’ve got the right deal for you.
You could save money with mortgage refinancing
The main reason to refinance your mortgage doesn’t get any better than that – you deserve to make the most of your hard-earned money. A few simple changes to your mortgage, like paying off your mortgage fortnightly instead of monthly, could save you thousands of dollars over the course of your loan.
Of course, there are a heap of other options that you can explore when you talk to a broker about your mortgage. Even small savings made over time could result in massive differences in your finances that would give you a much sweeter deal than what you may have expected.
Switching can be easier than you think
Many people know they could save money with mortgage refinancing, but are still a not quite ready to make the move. And that’s only natural because the world of finance can seem complex. When you’re busy with your work life, your family life and trying to balance a million different things, it’s not easy to keep track of what happens on your mortgage or to do the math to find out if there’s a better option out there.
Yes, there is a bit of work involved, but that’s just at the start and your broker can give you a hand with the paperwork. Talking with a mortgage broker means you’ll be able to lay out your financial situation and find the right mortgage option for your needs. Once you know where you stand and what your options are it’s a lot easier to make a smart decision.
Sign up for fresh, new features
Refinancing your mortgage is not just about changing up your financial institution – that’s just the start. You could also take advantage of some sweet new features.It could be the new rates that might save you money or it could be the option for you to repay your loan faster without paying penalty charges. Some loans won’t charge you a monthly account fee or a fee for withdrawing money when you need it. There could be a host of features that would give you more power over your finances when you refinance your mortgage.
Save on interest with an offset account
This is one of those features that sounds complex, but is actually really simple. An offset account could allow you to pay less interest without changing your interest rate - bananas, right? An offset account is a bank account linked to your home loan. Any money in the account is applied against your home loan, offsetting the interest like a repayment would. For example, if you have a home loan to the tune of $650,000, and you have a balance of $30,000 in your offset account. You’d only be paying interest on the remaining $620,000 in your home loan because the $30,000 in your offset account acts to reduce the balance of your mortgage.
There are different types of offset accounts, and you may want to check with a mortgage consultant to see which one would suit you. You could move to a mortgage with an offset account when you refinance your mortgage which could see you pay less interest and take years off your mortgage, in the long term.
Fund your dreams with your home’s equity
You might have planned a home renovation and be itching to get started, but you might not be quite willing to dig into your savings to get it done. Refinancing your mortgage can open the doors to your home’s equity, which could be used to fund your dream home renovation.
The line of credit your equity gets you depends on the value of your home and on the amount that you have repaid on your mortgage. You could use the new money available to you to fund your university education or buy one of the big ticket items that you would love to add to your home. The advantage of borrowing from your own home’s equity is that you might be able to save on cost compared to other types of loans.
Don’t believe how easy it is to switch? Our comprehensive refinancing guide will run you through all you need to know about refinancing your home loan.