Refinancing to Save
How would an extra $300 in your pocket every month sound? Would that make life a little easier? Reviewing your home loan interest rate, fees and charges is something we often consider as too hard and not worth the effort. Those that do review their loans regularly are the ones who normally come out in front.
There are several reasons to consider refinancing your home loan. It could be to access your equity for home renovations, to get funds for a holiday or to invest in another property or shares/managed funds. You may simply want to refinance to get a better rate, lower your interest costs and pay off your home loan faster.
A real life example and savings estimates:
To help you understand the potential savings, here are three examples where Loan Market clients have recently refinanced and saved on their home loans.
Case study one
Anna was paying $1,205 per month on her existing home loan of $285,000. Through refinancing she now pays $1,150 – a monthly saving of $55. Anna also used the available equity which her Mortgage Broker helped her access, to help purchase an investment property for $385,000.
Case study two
Jolene came to see her Mortgage Broker wishing to pay off her mortgage faster. She didn’t want to stick the usual 30 year plan. After refinancing her monthly loan repayments of $1,892 were reduced to $337. For Jolene, by keeping her repayment at the pre-refinance level of $1,892 each month she’ll actually save over $98,000 on interest over the life of her loan and reduce the term down by nine years and eight months. A great success story.
Case study three
Jim was paying $1,975 p.m. for his $312,000 home loan. Adam did not have the most competitive rate and was paying a $390 p.a. package fee. By refinancing he has saved $308 a month and switched to a no-frills basic loan product with no ongoing fee.
What you need to know
There are some factors to be considered to determine if refinancing is worthwhile for you. Every clients situation is different. When refinancing you will incur costs from your current lender (discharge fee) and also additional costs from the new lender (application fee, legal fee, valuation fee). As your mortgage broker I can scan the market to find the deals which minimise your refinancing fees (eg. Zero application fees etc) to make sure the process is worth it. Some of the lenders also offer refinance rebate which essentially cover your costs to refinance to them.
When reviewing your situation, I’ll be looking for an opportunity to save you money and put you in a better financial situation to help you achieve your goals much faster. If you would like a no obligation assessment on your savings potential please contact today.