Refinance Home Loan

Refinancing allows borrowers to obtain a loan better suited to their current circumstances. The rapid increase in homeowners equity due to rising property values in Australia has resulted in a surge of people investigating refinance options. As many as 33% of all loan applications are by people looking to refinance. Be sure to find out what your existing loan is costing you and compare that with whatever refinancing you are offered. Also compare features of the new and old loans and factor in changeover costs.

When you are looking at whether or not to take the mortgage refinance option, you should first consider certain factors.  If your current mortgage has a fixed rate of interest which is now far above what you would normally be paying because of a downturn in the economy, then you may have to pay break costs.  Break Costs are the costs involved in paying out your fixed interest rate for the remainder of the locked in period. These costs are quite substantial if your fixed rates are far higher than the current rates

It is important to consider mortgage insurance costs if you refinance above 80% LVR and discharge fees from your old lender as these can be high if the loan is not very old.