Many Australians are taking advantage of the potential cost savings that come with refinancing their home loans, as the amount is worth a significant amount of money. This has caused the number of people refinancing to reach an all-time high.
The Australian Bureau of Statistics revealed last year that refinance activities in the country have reached a new record. The value of external refinancing in August of last year reached $18.8 billion, a 5.3 per cent increase from July 2022 and 9.8 per cent higher than the previous year.
More and more Australians are becoming aware of the higher costs charged to customers who remain loyal to a company, known as a “loyalty tax.” They are choosing to refinance their properties to take advantage of better deals elsewhere.
Refinancing your home loan can be a good way to save money and reduce your overall interest payments. In Australia, refinancing your home loan can also be a great way to access funds for renovations, additional investments, and other big purchases. But navigating the refinancing process can be tricky, and it's essential to research and get the best possible deal. Here are a number of tips that can help you get the best deal on your home loan in Australia:
Start Shopping Around
When refinancing, the most important thing you can do is shop around for the best deal. Every lender has different rates and terms, so it pays to compare a few other lenders to get the best rate and terms for your situation. Be sure to look at banks and non-traditional lenders to ensure you're getting the best deal.
Learn More About Your Home Loan History
Before you start the refinancing process, it's essential to understand your current loan. Review your loan statement and look for any fees or penalties you may have incurred over the years. Also, review the interest rate you are currently paying and compare it to other lenders. This will give you a better idea of whether refinancing is the right choice for you.
Choose Between Fixed or Variable
Decide whether you want to switch to a fixed-rate or variable-rate loan. Fixed-rate loans offer the security of knowing that your interest rate won't change over the life of the loan, but variable-rate loans can offer more flexibility. Consider your needs and choose the loan that best suits you.
Understand Fees Better
Refinancing can involve a range of fees, such as application fees, settlement fees, and discharge fees. Understanding these fees and their costs can help you decide whether refinancing is right for you. It's essential to compare the fees charged by different lenders to ensure you get the best deal.
Get Professional Advice
It's vital to get professional advice when it comes to refinancing your home loan. An experienced mortgage broker or financial advisor can help you understand the different loan products available and ensure you get the best deal for your particular situation.
Consider Lender Loyalty
If you've been with your current lender for a long time, they may offer you a better deal than other lenders. It's always worth asking your lender about their loyalty discounts. That said, there may also be some great offers from competitors, so make sure you know more about your options.
Refinancing your home loan in Australia is a great way to save on interest costs, reduce loan duration, or switch to a different loan type. The tips we shared here with you can help you make the most of your refinance. If you wish to know more about refinancing, consult a trusted mortgage company in your area.
Wealthy You is a reputable Australian mortgage company that has been providing the best mortgage solutions in Sydney for almost a decade. If you're planning to refinance, our lending specialists can help you. Get in touch with us today to know how we can simplify refinancing for you!