Refinancing is the process of replacing your existing loan with a new one at a lower interest rate as a way of reducing your monthly payments. Many banks in Australia are now offering lower interest rates for new customers compared to current customers so you are likely to save more by refinancing your home loan and switching to a new provider. If you can reduce your interest rate then it is the right time to refinance your home loan and start saving interest.
How much will I actually save?
A small change can make a significant difference when it comes to home loan repayments. Let’s say for instance that you have a $400k loan over 30 years at 4.00% p.a. and you managed to re-finance that loan at 3.00% p.a. You would save $224 per month or $80k over the term of your loan.
We encourage you to look carefully at the terms of your potential new home loan. If you shorten the term, refinancing might not actually lower your repayments. Although you might be paying less over time, your monthly repayments might become too much to handle down the track.
How do I find a competitive home loan?
We understand that searching for the right home loan can be an overwhelming process. If you want to check that your mortgage is at a competitive interest rate, the team at APS Benefits can help you research other lenders. The best part is that our Mortgage Broking service is free! Learn more here.
APS Home Loans and Mortgage Broking
If you believe that it is the right time to refinance your home loan, we advise seeking expert advice before jumping into it. Get in touch to learn more about APS Home Loans and our free Mortgage Broking service. We are here to help you every step of the way.