An excerpt from the newspaper showing inflation and bank rates.
Another day, another news update: ‘Mortgage interest rates are at an all time national low’. You keep hearing the word refinance bouncing around and recall that your friend mentioned you should consider it, but the question still lies… ‘Should I refinance my home loan?’
The short answer? Yes! But only if it can secure you a better deal or get you to your ideal financial situation. Stuck on wrapping your head around refinancing? Check out our FAQs or download our introductory refinancing guide. Otherwise, read on below to find out the top reasons why you should refinance:
- To secure a better interest rate deal:
When was the last time you thought about your home-loan rate? If you can’t remember, we wouldn’t be surprised. Not many Australians want to give thought to how much interest they’re paying, usually we make the repayments and get on with it, but that knowledge could actually be very handy. Why? Because that small difference in interest could save you hundreds of dollars a month and thousands over the life of your loan.
I hear you but I want some stats, can you give me an example?
Compare scenario one to scenario two.
| Scenario 1 | Scenario 2 |
| Jeff buys a house for $1,000,000 and aims to pay the loan over 30 years at a 3.14% interest rate on a principal + interest repayment plan. This means he pays $4,292 per month. The amount of interest he pays over the life of his loan? $751,386. | John buys a house for $1,000,000. He also aims to pay the house over a 30 year period, however this time at a 2.97% interest rate on a principal + interest repayment plan. He pays $4,104 per month. The amount of interest he pays over the life of his loan? $477,307. |
But how do I find out my current home-loan rate?
Most lenders usually have a page listing the current interest rates for various home loan products. If you can find your home loan product on the list, you’ll be able to find your interest rate too! Other ways to find out your interest rate would be to call your lender, check your most recent mortgage statement, or if your bank offers it, your online or mobile bank accounts.
Where do I start on actually finding and getting a better rate?
Once you’ve found out your current interest rate, and the type of rate your home loan product is offering (that is a fixed, variable or split loan product), a quick comparison online between other interest rate offers could help narrow down which lenders you would like to refinance with. Another option would be to call your current lender and ask for a better deal, or to talk to us if you’d like some help.
With introductory interest rates at an all time low of under 2% and the average home loan rate currently between 2-3%, there’s never been a better or smarter time to refinance.**
Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstance and requirements.
