5 reasons it’s a good time to refinance

5 reasons it’s a good time to refinance April 2, 2020

Found yourself with extra time on your hands? Slightly worried about the amount of interest you are paying to your bank? Want to make use of those back-to-back rate cuts? While the world has changed significantly over the past month, it’s possible to use some changes to your advantage. 

Before we go any further though, we want to state that we aren’t looking to, and will not refinance your Home Loan unless there is a clear benefit to yourself plus we are confident you have longevity of employment both in the current climate and beyond.

We know there’s no shortage of Aussie families doing it tough right now and we want to reassure you that we continue to be here to help you any way we possibly can – including helping you apply for support packages with your current lender.

So where does refinancing fit in?

Well, the many social and financial changes that have been thrust upon us recently have combined to make it a good time to consider refinancing your home loan.

Here are five reasons why you may want to consider doing so.

1. Payment relief

When was the last time you refinanced your home loan?

If your answer was ‘two years ago’ (or longer), the finance and lending landscape has changed dramatically since then and it might be time to catch up.

There have been five RBA cash rate cuts since then since June 2019 alone – including two last month.

And while we’re on the RBA, a recent study of theirs found that borrowers who refinance with another lender, or negotiate a better deal with their existing lender, do in fact achieve interest savings.

So if you or your partner have recently had your work hours cut back and you’re starting to worry about how you’ll meet your monthly mortgage repayments, refinancing could be a worthy consideration.

2. Consolidate your debts

Refinancing can also help you consolidate your other debts – including your credit card, car loans or personal loans – by combining them into a refinanced mortgage.

Not only will this give you one simple repayment to make each month (reducing the risk of forgetting payments and being slugged with a late fee), but all your debts will be charged at your home loan interest rate – which is usually much lower than credit card rates, for example.

3. Low interest rates: time to lock one in?

Fixed rates have recently experienced a big drop.

In fact, Domain’s David Hyman has described the current batch of fixed interest rate loans as “staggeringly cheap”.

“Only a couple of months ago the cheapest headline rate started with a three. If you look back to this time last year rates were in the high threes,” Hyman explains.

“For someone with a half a million dollar mortgage, that is well in excess of $10,000 a year in savings. It’s never been a better time to refinance quite frankly.”

And with the official RBA cash rate now at a record low 0.25%, there isn’t a great deal of room for it to go much lower.

4. Time on your hands

One of the more common reasons home owners give for not refinancing is that they simply don’t have the time do so.

But, without pointing out the obvious, I think it’s fair to say that we have far fewer social commitments taking up our time at present.

So, if you’ve compiled a list of things to do to keep busy at home, consider adding refinancing to the list.

Once you get the ball rolling on it and get in touch with us you’ll be surprised how little you actually have to do – after all, that’s our job, right?

5. We’re available to help you, whenever you need us

Finally, rest assured that we’re available and here to help you any way we can. If you think you may need assistance into the near future, action it now with us and we’ll work through your options with you.

Stay safe.


Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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