Thanks to mortgages, homeownership is made more attainable—you can have your house now and pay for the rest of your loan throughout several years. Since the repayments on your home loan are spread over a long time, the amount of money you’ll pay back monthly is more manageable and affordable!
Or is it?
When the Burden Is Too Heavy
Once you’ve gotten the key to your home and have settled down, it’s time to face your new responsibilities as a homeowner. A mortgage may have allowed you to own a residential property, but now, you’re expected to pay back your mortgage every month. This may be what you’ve agreed on, but the burden could turn out to be more difficult to bear than you imagined.
Home loans are perhaps one of the biggest monthly payments you have to make and one of the most common forms of debt that most Australians have. The monthly amount may seem reasonable, but when you compare the amount borrowed to the amount to be repaid, you’re actually paying back a lot more than you originally borrowed!
Life is unpredictable—your financial situation when you signed the mortgage may not be the same as your life now. Monthly repayments can be a weighty financial responsibility, maybe so heavy that you can’t manage to pay for them for much longer. Luckily, you don’t have to stick with your home loan forever—you have a chance to ease your burden through refinancing!
Should You Refinance Your Mortgage?
Many people think that you should be committed to your home loan until the end, but this isn’t the case. You’d be surprised how many Aussies switch to different loan types or lenders! In fact, the Australian Bureau of Statistics reported in May of last year that the number of external refinances rose to 29.19 per cent.
Here are three signs you should refinance your mortgage:
Dropping Interest Rates
Better home loan rates are perhaps one of the most popular reasons for changing to a different loan. Lower rates mean the less you’ll have to pay for every month. If you can reduce your current interest rate by 0.75 to 1 per cent, then you should refinance your home loan.
Unsatisfied with the Current Lender
Life happens and things change; what may have seemed like a good deal isn’t anymore. If you want better benefits, you should switch to a different lender with a better interest rate, terms, customer experience, or features. Work with a Sydney refinance mortgage broker to help you with comparing various loan options and refinance rates in Australia.
Desire to Convert to Fixed-Rate
A variable rate mortgage may be a good option at first since you are often subject to lower interest rates in the beginning, but they can fluctuate significantly after the introductory period.
Monthly mortgage payments could become more and more challenging to manage as interest rates move up. A fixed-rate loan is a perfect alternative if you want to avoid the constant worrying about the subsequent fluctuation.
Nothing stays the same forever—it may be your financial situation, credit score, or needs, but whatever it is, you’re allowed to look for a different loan that could serve you better. Refinancing your home loan is a big change; think about it carefully, use a Sydney mortgage refinance calculator, and reach out to a refinance mortgage broker in Sydney so that you can get the best possible deal.
Are you looking to refinance your home loan? Work with the best Sydney refinancing mortgage broker, Wealthy You! We make refinancing your home simple. Regardless of your financial need, we have a mortgage solution that will help you achieve your financial objectives. Apply to refinance your home loan today!