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- HOME
- BUYING YOUR
FIRST HOME? - UPSIZING OR DOWNSIZING
YOUR HOME? - INVESTING IN
PROPERTY? - BUILDING OR RENOVATING
YOUR HOME? - REFINANCING OR
CONSOLIDATING DEBT?
FAQ - Refinancing
- What is refinancing your home loan?
- Why refinance?
- Will refinancing benefit me?
- Should I refinance with interest rate rises?
- I have credit card debts and personal loans. What is the benefit of consolidating?
What is refinancing your home loan?
Refinancing is when you change your home loan from your lender to another; enabling you to switch to a new loan to suit your new circumstances.
Why refinance?
Home loans an be refinanced for a range of different reasons including:
- To pay off or consolidating debts such as credit cards and personal loans by rolling them into your home loan
- To obtain a cheaper rate and pay off your mortgage faster
- To increase your loan to purchase a car, renovate or just have a holiday
- You want to switch from a variable rate to a fixed rate to reduce the risk of higher repayments
- The products or service your current bank offers does not match your needs today
Will refinancing benefit me?
It depends how competitive, or otherwise, your current home loan is. Refinancing can be a smart way to manage your money to obtain a lower mortgage interest rate and lower monthly repayments, which will improve your cash flow.
Should I refinance with interest rate rises?
When the Reserve Bank raises interest rates, banks and other lenders usually follow suit by increasing your mortgage repayments. Refinancing your home loan from a variable to a fixed rate can provide certainty with your repayments; noting that there is normally quite a difference between these two types of interest rates, which means the repayments will also differ.
I have credit card debts and personal loans. What is the benefit of consolidating?
By consolidating various smaller debts like credit cards or personal loans into one large debt, you may be able to reduce interest rates or lower your monthly repayments. Plus you only have one loan to keep track of.
Consolidation is most affective when you make an effort to put some of your savings towards paying off your loan faster.
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