Myth Busting – Understanding Refinancing Myths
It can seem simpler for homeowners (like you) to stay put when it comes to your home loan however for those willing to look around, there can be a lot to gain. We’ll look beyond the refinancing myths so you can take it out of the too hard basket and reap the benefits.
Myth #1: Refinancing is too complicated.
Myth busted! While you may need to get a few ducks in a row to keep you on track to refinance your home loan, your mortgage broker will help do the legwork.
Myth #2: Refinancing is not for me!
Refinancing your home loan is not something reserved for just a few people – if you have a mortgage, you deserve a better deal. For many homeowners, it can feel to hard and time consuming to figure out if refinancing your loan is the right option. Well, that’s where we can help, a mortgage broker could review your home loan to understand your options and to see if there’s something more competitive out there for you.
Myth #3 – You don’t save much with interest rates just 0.50%p.a. Lower.
Let’s take a look at the figures: Imagine if you decided to switch from a 5.50%p.a. interest rate to an interest rate of 5.00%p.a. on a $500,000 mortgage over 30 years. The difference in interest rate is just 0.50%p.a., but that could mean a reduction of close to $55,000 over the life of your home loan, which would be over $150 saved every month - hello savings!
Now, before you jump in, don’t forget to factor in other things like additional features, flexibility and annual fees on your loans.
Myth #4 – Fixed rate home loans are not eligible for refinancing.
We think this myth might come from the term “fixed” rate – “if it’s fixed, it can’t be changed”! But fixed rate doesn’t actually mean your home loan terms have been set in stone – what it really means is that your current mortgage is set at a fixed interest rate and there’s normally a fee to pay if you want to break the mortgage within a certain timeframe.
If you have a fixed rate, a mortgage broker will help you weigh up the costs to see if refinancing is the right option for you and your current situation.
Not sure if now is the right time to refinance? This simple-to-follow refinancing guide will step you through everything you need to know, helping you understand when the steps to refinancing your home loan.
Disclaimer: This document has been created by Loan Market Pty Ltd (ABN 89 105 230 019, Australian Credit Licence number 390222). Any refinancing is subject to 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. The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. Whilst all care and attention is taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances.Any refinancing is subject to 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. Loan Market Pty Ltd | Australian Credit Licence 390222.