With interest rates constantly shifting and loan products becoming more competitive, revisiting your current mortgage could lead to real savings. Whether you’re looking to reduce your monthly repayments or pay off debt faster, refinancing can be a smart move, if you do it with care.
Here’s what you need to know to make sure your refinancing decision works in your favour.
Bundle and save, if it suits your strategy
One major benefit of refinancing is the ability to consolidate other debts, like a car loan or credit card, into your mortgage. Because home loan interest rates are generally lower than personal or consumer credit rates, this can help cut down your overall repayments.
But there’s a catch. Stretching out short-term debt over a 25 or 30-year loan term can cost more in the long run. The key? Use your refinancing savings to pay down your home loan faster, not just to ease your cash flow.
Fast service isn’t always guaranteed
Many lenders talk up their turnaround times, but in reality, delays and paperwork issues are common. Whether you’re with a big bank or a boutique lender, things can still fall through the cracks. That’s where a mortgage broker comes in handy, they can follow up on your behalf and keep things moving when the process stalls.
Beware of too-good-to-be-true rates
If a lender offers a flashy “honeymoon rate”, make sure you read the fine print. These ultra-low introductory rates often bounce back to a much higher figure after a few months and you could be stung with hidden fees or restrictive loan conditions.
Instead of chasing the lowest rate, look at the long-term value of the loan. How much will it cost you over the full term? What flexibility do you have?
Exit fees and long-term planning
Some loans include exit costs if you decide to pay them off early. That doesn’t mean they’re a bad choice, but they’re better suited for those who plan to hold onto their mortgage for many years. Know what you’re signing up for before you commit.
Only pay for features you’ll actually use
All-in-one loans sound great on paper, they combine your income, savings, and debt into one flexible account. But they often come with higher fees and interest rates. Before you sign on, think about how you really use your money.
Speak to a lending expert and weigh up whether those added features are worth the extra cost. You might discover a simpler product is a better (and cheaper) fit for your lifestyle.
A word from your local agent
As a real estate agent, I’ve seen clients make big financial gains simply by reviewing their home loan. Whether you’re buying, selling, or staying put, having the right finance setup can make all the difference.
If you’d like a referral to a trusted mortgage broker, or want to chat about how refinancing could impact your future property plans, reach out anytime. I’m here to help you make smart moves in today’s market.
