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Home Loan Refinancing :
How to Navigate the Process

HOME LOAN REFINANCING

Refinancing your home loan means that you’re replacing your current mortgage with a new one, typically to get a lower interest rate, reduce your monthly payments, change the loan terms or access the equity in your home.

With rapidly rising interest rates, home loan refinancing offers the potential to optimise your finances and save thousands of dollars over the life of your mortgage. 

A general rule of thumb is that homeowners should consider refinancing every 3-4 years to ensure that they’re getting the best deal possible. Banks often offer better interest rates to new customers rather than existing ones. Moreover, with banks offering refinance cash backs and waived application fees, it is a worthwhile exercise to consider refinancing.

WHAT ARE THE BENEFITS OF REFINANCING YOUR HOME LOAN?

  • Lower interest rates, resulting in reduced monthly payments;
  • Access to home equity for renovations, investments, or other financial needs;
  • Consolidation of high-interest debts into a single, more manageable loan;
  • Shortening the loan term to pay off your mortgage faster and save on interest;
  • Switching from a variable to a fixed-rate mortgage for stability and predictability.
Discover Our Dedicated Refinancing Blogs Here

Ready to access better rates? Speak to a Shore Financial specialist today!

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    Home Loan Refinancing FAQs

    How can I qualify for the best refinance rates?

    Qualifying for the best refinance rates depends on several factors, including your credit score, debt-to-income ratio, loan-to-value ratio, employment history, and the overall health of your financial situation. To improve your chances of securing better rates, focus on improving your credit score, reducing existing debt, increasing your income, and speaking with your broker to compare offers from multiple lenders.

    How much can I save by refinancing?

    The amount you can save by refinancing depends on various factors, such as your current interest rate, the new interest rate you qualify for, the remaining term of your loan, and any associated fees.

    You can use our home loan refinance calculator to find out how much you can save by refinancing.

    How much equity do I need to consider refinancing?

    Generally, you need at least 20% total equity in your home to refinance the loan. If you have less than 20% total equity in your home, you may still be able to refinance but you may have to pay LMI again.

    What are the costs associated with refinancing?

    Refinancing costs vary, but they range between $900 – $3,500. The costs associated with refinancing your home loan may include:

    • Application fees;
    • Loan origination fees;
    • Appraisal/Valuation fees;
    • Title search and insurance fees;
    • Closing costs;
    • Prepayment penalties (if applicable); and
    • Mortgage insurance premiums (if applicable).

    Important questions to ask when refinancing a home loan?

    Before refinancing your home loan, it’s crucial to ask the following questions:

    1. What is your current interest rate and how does this compare to interest rates on offer?
    2. What fees and closing costs are associated with refinancing with my current bank, and can they be rolled into the new loan?
    3. Are there any prepayment penalties or exit fees associated with paying off my existing mortgage early?
    4. What loan terms and features are available, and how do they align with my financial goals?
    5. Can I lock in a fixed interest rate to protect against future rate increases?
    6. Will refinancing affect my credit score or eligibility for future loans?
    Refinancing can be a complex and confusing process, and there are many factors to consider before making a decision. Our Shore Financial specialists will happily answer any of your questions and streamline the process for you. Contact us today!

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