Change is inevitable. Over time we alter our plans, give our
options a chance. When your current financing plans go haywire,
missing expectations and falling short of your targets; we have
well researched refinance plans to calibrate the monthly payouts
to your spending capacities.
On the other hand, we denounce with righteous indignation and
dislike men whos of pleasure of the moment, so blinded by
desire, that they cannot foresee the pain On the other hand, we
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Australia’s cash rate is at its lowest level in history. Many banks are offering thousands of dollars in cashbacks for new home loan refinance customers. Does that mean the time is right to make the most of the low cash rate environment and refinance your mortgage?
With the current cashback offers and record-low interest rates, it is worth looking at the market and seeing if you can take advantage of the low-interest-rate environment as an existing home loan customer.
When rates have dropped, the big four banks haven’t always passed on the rate cut in full. But neo-banks, regional banks, credit unions and other some lenders might pass rate cut in full. All of which have lead to a very competitive market for home loans. The upshot is your bank might be eager to keep your business if you show signs of leaving. Or you could find a better deal somewhere else.
Refinancing your mortgage can be beneficial in several ways. It can give you a better interest rate saving you money, allow you to access improved loan features, or be used as a way to consolidate several debts into one mortgage.
How much could you save?
As the RBA says in one of its statements, Australians with older variable rate home loans have higher interest rates than those with newer loans. They found if your loan is more than four years old, that could mean an interest rate 40 basis points higher than a new loan. And your loan is older than that, your situation could be even more disadvantageous.
Also, banks are offering even greater discounts to their advertised standard variable rates, the statement said. These cuts can be as high as 1.5 per cent, compared to one per cent five years ago.
Should I stay or should I go?
With increased competition comes the choice of whether to move to a new lender with a better rate or to use that better rate as leverage to refinance with your current bank. APRA’s home loan rule relaxation has reduced the barriers for borrowers to switch lenders, and if you are a responsible borrower, your current bank will be keen to retain your business.
If you can’t negotiate a new rate, switching to a new bank may be the answer. One advantage of that process is that your new bank will often take care of the exchange for you, paying out the existing loan and instructing the other bank to release the security and title without you having to be part of the process.
How to refinance?
You’ll need to have all the documentation and competitor knowledge necessary to negotiate a refinance. We, at Finance Point will be able to provide advice about the best loan and features for you, and how much you can borrow. We also help with assessing the different loans in the market and guide you through the refinancing process towards the best outcome.
A Finance Point mortgage broker can help position you as an attractive borrower to lenders, while finding the best bank for your home loan refinance.
To find out more about getting started on your application, contact us today.
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