Refinancing Your Mortgage



Is your mortgage feeling a little out of date? Perhaps you are wondering if you could get a better deal? Maybe you just want to release some cash to fund other projects such as a holiday, to invest in shares, buy an investment property, or carry out some home renovations?

Refinancing is a great way of changing the terms of your home loan, by replacing the existing one with a new loan. For example, you may wish to switch from a fixed rate loan to a standard variable rate home loan. This new loan may be with a different bank or lender, or it may be with your existing lender. It is very normal for people to find their circumstances change over time, and need to consider refinancing as a way to match their home loan with their lifestyle.

Why refinance?

* You may be able to get a lower interest rate than you are currently paying and potentially save money.
* You may be able to change your repayments to a lower amount if you are struggling to keep up with the mortgage payments
* Refinancing can free up cash for other projects and help cover major expenses such as a new car or a second property
* You can refinance in order to consolidate your debts. By paying off your credit cards or other personal debts via your mortgage, you can pay off the debts with a lower interest rate than the rate of your credit card

Considerations

* A lower interest rate does not always mean that you save money. Be careful not to get tempted by a lower rate, the lower rate may come with hidden fees attached or a longer loan term.
* Exit fees charged to release you from your current loan can add up to several hundred dollars. Ensure that the costs at the beginning will be worth it in the long run. For example, if all the fees add up to $500 to refinance your loan, and your new loan saves you $50 per month, it will take you ten months to break even.
* A new lender will need to consider your credit history as well as your current and future financial situation.


When refinancing, take some time deciding what options are best for you. Your mortgage repayments are probably the single biggest monthly expense so it makes sense to look after your home loan and find the best deal for your personal circumstances.

Rooster Mortgages brokers are skilled in refinancing negotiations, and qualified to help you make the right decisions.