Great home loans for refinancers
Home loans typically last for 25 or 30 years, unless you repay it early or refinance.
Refinancing means using a new loan to pay off the old loan. Effectively you are switching from one mortgage provider to another.
Refinancing is usually done to save money, consolidate debts or to increase your loan amount (maybe you’d like to renovate the bathroom?). You may also want a loan with offset or redraw.
Every financial decision you make in life has to be considered and weighed up. You need to do your research and your first port of call should be a trusted comparison site to look over the market for loan products.
Chat with a financial adviser or mortgage broker if you have questions. Yes, you’ll have to do some maths and you probably want to sleep on your decision for a night or two before applying for a refinancing deal.
Now that all that has been said, refinancing could be one of the best financial decisions you can make. The potential savings that can flow from moving from an expensive home loan to a cheap one are huge so everyone should at least check it out.
Which bank has the best refinancing home loan deal?
All banks and other lenders love refinancers and have enticing deals to lure borrowers from other institutions to switch to their own products.
But there’s no such thing as the best deal. It’s more a case of which refinancing deal is best for you and your circumstances. The idea is to reduce your spending on your mortgage, as well as deals with extra perks like redraw facilities and flexible repayments.
How to find your best refinancing deal
You need to ask yourself a few questions to help you to narrow your search down.
What sort of loan do you want?
You may have been on a variable rate and now you want a fixed deal. It could also be the other way around. Another reason for refinancing is to migrate to a deal that lets you make penalty–free overpayments regularly. You might want a deal that offers a redraw facility or just a more attractive interest rate so you’re paying less each month. Make a list of your wants and needs before you head to a comparison site.
How much do you want to save?
This is probably your biggest consideration. You need to make sure that the savings you’ll make on your new rate outweigh any early termination fees, set up fees and so on. Use a refinancing calculator to work it all out – you should save more on your mortgage payments than you spend on any early exit fee.
Do you want a whole new repayment term?
If you’re looking to reduce your overall spend on your home loan then a shorter term will do this for you as you’ll be paying less in interest over the years. You’ll have higher monthly repayments, however. If you extend your term, then your monthly repayments will be lower, but you’ll be paying interest for longer and so your final spend will be higher, even if your rate is lower.
How to compare refinance deals
You can always speak to your current lender to see if they can offer you a better deal. Lenders usually have incentives and deals that they don’t publicise too much so they can pull them out to persuade existing customers to stay with them. Do shop around, though, as there’s always new opportunities out there with other lenders.
Check out interest rates
You’ll want to look at this first when you’re comparing lenders and deals. Decide whether you want a fixed or variable rate and also look at what your longer–term plans are.
If you’re looking at upsizing in the next few years then a shorter fixed deal will be best so that you’re more agile; if you’re planning to stay in the area for a long time, then a longer fixed period is better.
Look at the fees
Establishment fees, application fees, exit fees, monthly fees, annual fees, loan lodgement fees. Check them out and compare comparison rates to ensure you are factoring in fees to your refinancing equation.
Check out the features
You might want to do away with ongoing fees, for example. Or you’re looking for a new deal that lets you make penalty–free overpayments because you’ve had a promotion or your partner has gone back to work after having children and there’s more money coming in. If you’re looking for a second home loan, do you get any perks for sticking with the same provider?
Make sure your credit history is fairly robust
A good credit rating will always help when it comes to upgrading your mortgage because you’ll attract better rates. Order your credit report and comb through it to make sure there’s no negative listings on there that shouldn’t be; get them removed if you find any. The good thing about refinancing your home loan is that you know when your term is up so you can get ready for it. If you know you’ve got some bad financial habits, like not paying your mobile phone bill on time, then you can make sure you’re prompt with your payments for the foreseeable.
Your phone contract is actually a credit agreement and late payments will chip away at your rating.
Here are just three great refinancing deals
Every lender has home loans that are available for refinancers. Here are some great ones to get you started on your search for a better home loan deal.
The Athena Owner Occupier Principal & Interest (Refinance Only) home loan has a current variable comparison rate of 3.05 per cent pa for LVR of 80 per cent or lower.
Athena also offers a refinancing deal for investors with a comparison rate of 3.45 per cent (you’ll still need an LVR of 80 per cent or lower).
FreedomLend’s Owner Occupied Special Variable P&I 80% home loan has a current comparison rate of 3.04 per cent pa.
The UBank Discount Offer for Owner Occupied Variable P&I (over $200K) home loan has a current comparison rate of 3.09 per cent pa.
Compare home loans from Australia’s banks, credit unions and other lenders at InfoChoice.
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.
Rates are headline rates at the time of publishing, not comparison rates, fees not included.
Rates based on owner-occupier, variable rate, principal and interest 25-year, $300,000 loan amount with a package.
Comparison rate is based on a secured loan of $150,000 over the term of 25 years.
WARNING: These comparison rates apply only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan