Home loan interest rates

Review your home loan to save in 2014

As we move through the end of the financial year, many of us start looking at our finances and tax returns so that we can plan a well-deserved break for the second half of the year or even start planning for Christmas.

When looking at finances and planning for the rest of the year, thoughts often turn to the bigger picture. Perhaps you are planning a large-scale holiday, or increasing the size of your family, or perhaps you are looking at upsizing (or downsizing) your property. This is the ideal time to review your home loan to see if a better deal is available.

According to industry research, one in five mortgage holders have refinanced their homes over the past year due to a change in lifestyle and living arrangements.

This growing trend in home loan refinancing looks like it will continue into the future and with good reason – it not only has the potential to save you thousands of dollars but can also help repay your debt much quicker than originally anticipated.

There are a number of options for refinancing your home loan, including switching to a split loan of variable and fixed interest rates, accessing features such as redraw options, free unlimited extra repayments, or rolling your loan over to a new property to avoid new loan setup fees. Depending on your financial institution many of these options may be available to you at no extra cost.

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A further major reason for refinancing is to streamline your finances by consolidating your debts, reducing interest charges, and minimising the number of different monthly creditor repayments.

Regulations introduced in 2011 make it easier for mortgage holders to refinance and switch lenders. Loans that are now taken out no longer have an attached exit fee and loans taken out before 1 July 2011 may still have costs associated with refinancing, however your financial institution may agree to offset a portion of those fees. It is always worth asking your institution what options are available and are most suited to your situation.

One important thing to remember when considering refinancing is any associated additional costs. Think about the time you will put in, the energy you take to research options, and even travel time associated with meeting different lenders. Do these costs outweigh the benefits?

As a very first step you should speak to your financial institution about your current situation, your plans for the future and your financial situation. This will enable you to fully consider all options available to you and make an educated decision.

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The information presented is general in nature and has been prepared without taking into account your objectives, financial situation or needs.  Before making any decisions you should consult your financial institution.