4. Find a More Suitable Loan
There are so many lenders out there offering different types of loans. While one loan product may have been ideal for you when you first set up your mortgage, you may need a different set up further down the track. Refinancing gives you the opportunity to move to a new loan with a structure that better suits your current needs and future goals.
Switch Your Interest Rate
Your existing mortgage may be set up with either a variable, fixed or split interest rate. As the names suggest, variable rates can go up and down with the market, while fixed rates are locked in for a set period of time.With a split interest rate, part of your loan will be fixed, and the remainder will be on a variable rate. Depending on your situation and what’s happening in the market, it might be good for you to refinance to a loan with a different type of interest rate.
Change Your Loan Term
Refinancing can lead you to reduce your repayments and increase your loan term, but you could also switch to a loan that will help you pay off your mortgage faster. A loan with a lower interest rate, an offset account or higher repayments could help you bring down your debt in a shorter period of time.
Access Extra Loan Features
Refinancing can also allow you to take on a new loan with extra features. Offset accounts, redraw facilities and more flexible repayment options are just some of the benefits you may be able to enjoy if you switch to a new loan.
5. Take Advantage of Promotions
Banks will often have various promotions on offer to encourage customers to move their loan to them. Sometimes banks will also provide incentives to existing customers to help sweeten your deal and retain your business. Cashback offers, rebates, special interest rates and more are popular promotions that banks will often run for refinancing. Just make sure you take note of the costs and any fees associated with refinancing to make sure the incentive is worth it.
Thinking About Refinancing Your Mortgage?
While there are many benefits of refinancing your mortgage, it’s not always the right move for everyone. Depending on your situation, the potential gains may not outweigh the drawbacks. To get the most out of refinancing, you need to do it at a time that’s going to work best for you. If you’re not sure whether you should refinance, get in touch with the experts at Loan Monster.Our mortgage brokers can sit down and have a chat with you free of charge to help you make a good decision.
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* The information contained in this website should not be taken as constituting personal advice. We recommend that you seek professional assistance before acting upon any information provided or linked on this website