fbpx
1300 416 700
Home Loan Types The Team Calculators Learning Our Difference Get in Touch
Refinancing

5 Benefits of Refinancing Your Home Loan

5 Benefits of Refinancing Your Home Loan

What is refinancing your home loan? Well, it involves changing the mortgage provider to another provider in order to receive a better deal. This is often because a lower interest rate, a lower payout, or a longer loan period can be achieved.

A lot of people are worried about refinancing their home loans due to the fact that they’re not sure if their current lender will allow them to do so. Fear not, as this article will walk you through the process of refinancing your home loan, should you want to.

The Benefits Refinancing

Before deciding on refinancing your home loan, you’ll want to be informed of the process. Otherwise, you may find yourself paying a higher interest rate than what is necessary. If you do find yourself in a situation fit for refinancing solutions, then here are the benefits:

Benefit #1: Save on Interest Charges

The number one benefit of refinancing your home loan is that you’ll save on interest charges. This will, in turn, save you a lot of money in the long run.

If you’re in a situation where you’re currently paying around 6% interest per annum and you’re able to find a mortgage provider that’s willing to offer you a low-interest rate of around 4%, you’re going to save a substantial amount of money.

Benefit #2: Lower Repayment Options

Another benefit of refinancing your home loan is that you have more flexibility when it comes to repayment options. For example, if you currently have a 5-year fixed-term loan, you could negotiate with your lender to change it to a 10-year fixed-term loan. This will save you a great deal of money, as you’ll pay less in interest.

Benefit #3: Adjustable Loan Period

If you have an adjustable loan period, you may be able to switch to a fixed-term loan on your own. With a fixed-term loan, you’ll know exactly how much you’ll pay per month in order to pay off the loan. This is sometimes more beneficial than an adjustable loan period, as you’ll be able to plan your finances accordingly.

Benefit #4: Maximise Your Home Equity

If you find yourself in a situation where you have an adjustable loan period, you might want to refinance your home loan in order to take advantage of your home equity. For example, let’s say you have a $200,000 home loan. If you decide to refinance your home loan, you might be able to negotiate with your lender to have a $250,000 home loan. This will give you another $50,000 to work with.

Benefit #5: Organise Your Debt Into One Loan

Another reason to refinance your home loan is that you can organise your debt into one loan. If you currently have multiple loans to pay off, you might want to consider refinancing your home loan so you can have one loan to pay off. This will help you to manage your debt and make it easier for you to meet your dues. 

The Bottom Line: Refinancing Your Home Loan can Be Beneficial in More Ways than One

If you find yourself in a situation where you’re not sure if you want to refinance, there are a lot of benefits to doing so. Some of the benefits include saving on interest charges, lowering your repayment plan, and also taking advantage of your home equity.

But, don’t forget to consider the drawbacks to refinancing your home loan. There are quite a few, so if you’re not sure, you might want to consult with a professional who can guide you through your options. 

Are You Looking for a Mortgage Broker in Australia?

When you need a mortgage broker in Australia, it pays to work with the best. As a leader in providing professional mortgage broking services to home buyers, Shore Financial is here to help you choose the right loan to fit your needs. Our extensive knowledge of the mortgage market allows us to choose the best loan provider to suit you. 






Learning

Related Articles

Refinancing

Does it Cost To Refinance Your Mortgage?

9 Oct 2023
Refinancing

When To Refinance Your Home Loan

20 Jul 2023
Refinancing

Fixed-Rate Term Expiring Soon? Here’s How You Can Prepare

6 Jan 2023
Investing
Refinancing

How to Turn Your Owner-Occupied Property Into an Investment

1 Aug 2022
Refinancing

When and How Often Should You Refinance?

4 Jul 2022
Refinancing

What You Have to Know about Refinancing a Home Loan

16 May 2022
Refinancing

5 Benefits of Refinancing Your Home Loan

26 Apr 2022
Refinancing

Why Now Might be a Great Time to Think About Refinancing

13 Apr 2022
Refinancing

Is Now The Right Time To Fix Your Interest Rate?

19 Nov 2021
First Home Buyers
Purchasing
Refinancing

How a Change in Your Employment Structure Can Affect Your ...

19 Jul 2021
Refinancing

Refinancing Your Mortgage for Home Renovations

21 Jun 2021
Refinancing

The Real Reason Why You Should Switch to Fortnightly Repayments

14 Dec 2020
Purchasing
Refinancing

How to Purchase a Second Property Without a Saved Deposit

16 Oct 2020
Refinancing

Why You Should Look out for Refinance Cashback Offers

15 Sep 2020
Refinancing

Refinancing 101: The Facts You Need to Know

15 May 2020