With interest rates on the rise, many homeowners are wondering if it’s time to refinance their home loan. Refinancing can be a great way to save money on your monthly mortgage payments, but it’s important to weigh the pros and cons before making a decision.

What Are the Benefits of Refinancing?

  • You can get a lower interest rate. This is the most common reason people refinance their home loans. If interest rates have fallen since you took out your current loan, you could save hundreds or even thousands of dollars each year by refinancing.
  • You can access new features. Some lenders offer features that others don’t, such as offset accounts or redraw facilities. If you’re looking for a more flexible loan, refinancing could be a good option.
  • You can consolidate debt. If you have other debts, such as credit card debt or car loans, you can consolidate them into your home loan. This can help you save money on interest and make your monthly payments more manageable.

What Are the Drawbacks?

  • You may have to pay closing costs. When you refinance your home loan, you’ll likely have to pay closing costs, which can be several thousand dollars.
  • Your credit score could be affected. Refinancing can have a temporary impact on your credit score, so it’s important to make sure you’re in good financial standing before you apply.
  • You may have to pay early termination fees. If you’re on a fixed-rate mortgage, you may have to pay early termination fees if you refinance before your term is up.

How To Decide if Refinancing Is Right for You

If you’ve had your loan for more than 12 months or your financial situation has changed, it may be worth considering refinancing. To decide if this is right for you, you need to weigh the pros and cons and do your research. Here are some things to consider:

  • Your current interest rate. How much would you save by refinancing?
  • The closing costs. How much will you have to pay in closing costs?
  • Your credit score. How will refinancing affect your credit score?
  • Your financial situation. Are you in a stable financial position?
  • Your goals. What are your goals for refinancing?

How to refinance

Refinancing your home loan can be a great way to save money, but it’s important to weigh the pros and cons before making a decision. If you’re considering refinancing, talk to a mortgage broker to get started.

Contact us to find out how we can help. We’d love to hear from you.