Home loan refinancing can be a confronting process, but did you know it’s not as long-term a commitment as you may think? It’s understandable to be overwhelmed by a home loan; there’s nowhere to hide when it comes to your financial situation, and making a big decision for your future can be stressful. 

Mortgage refinancing allows you to adapt and change your home loan plan, remain flexible, and maintain sustainable loan repayments that keep you on track to owning your home outright. So what do you need to know about mortgage refinancing?

Should I be considering a refinance loan? Mortgage refinancing explained

Refinancing your mortgage refers to adapting or changing your current home loan. The process might involve:

  • Adapting your current loan to suit your changing circumstances
  • Reconfiguring your loan agreement to include newly released benefits 
  • Exiting your current loan in favour of another loan with competitive interest rates or conditions that are more appropriate for you now.

The mortgage refinancing process may help shorten your loan term and/or reduce your repayments, ultimately streamlining your mortgage payments so you’re a debt-free homeowner sooner. Determining if refinancing is the right step for you requires an assessment of your equity, borrowing capacity, lifestyle, goals and timeline. Mortgage refinancing isn’t the best choice for every homeowner, but it has the potential to save eligible homeowners significant amounts of money.

What’s in it for me? Mortgage refinancing benefits

Whether or not you’re considering mortgage refinancing, it’s a worthwhile habit to review your home loan yearly. Your lifestyle and budget may change, there may be a new home loan offer that suits you better than your original plan, your timeline or goals may have moved; your original loan might not remain the most suitable loan for you. Mortgage refinancing benefits can include:

  • A lower interest rate to help you pay off your home loan sooner
  • Access to flexible features or add-ons that weren’t available when you initially took out your home loan
  • A reduced monthly payment
  • Debt consolidation i.e. placing your credit card debt or car loans into a monthly payment conjoined with your mortgage
  • Access to equity for other investments, renovations, or personal expenses like a new car

What’s the catch? Mortgage refinance fees

Mortgage refinancing can save you money in the long run, but it’s important to be aware of any immediate fees involved in changing your home loan. Mortgage refinance costs may include:

  • Settlement fees
  • Loan establishment fees
  • Break costs 
  • Exit charges 

The specialist refinancing brokers here at Loanscope can take you through these fees to help you determine if the benefits of refinancing will justify the cost to you now.

What’s available to me? Mortgage refinancing options

With the help of Loanscope, your mortgage refinancing options are strong and diverse – we compare over 600 loans from 30 lenders to match you with a loan that can improve your current and future financial situation. The lending market is always changing and we stay abreast of these changes to ensure the advice we provide incorporates the latest developments. 

When considering switching home loans, be mindful of mortgage refinancing interest rates. While a lower interest rate is attractive, there are always other variables that are crucial to consider. A trusted mortgage broker can help you understand the pros and cons of any option to find your most suitable home loan refinancing offer.

Wondering how much you could save? Try comparing your options with our mortgage refinancing calculator. This calculator is a helpful overview, but there’s still plenty to consider before finalising your choice, such as your borrowing capacity and equity.

What’s my next step?

It’s always wise to consult an advisor before making significant financial decisions. A Loanscope broker will tailor advice to your personal situation and goals. We’ve forged healthy relationships with major banks and financial institutions and have a strong reputation for home loan approvals. Speak with a specialist refinancing broker about your mortgage refinancing options for personalised expert guidance.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Emmanuel Guignard (MBA)
Director & Principal Mortgage Broker
With over 15 years’ experience in the finance industry and a recently completed MBA in Financial Planning, Emmanuel leads the broking team at Loanscope. His experience includes working with a wide range of property investors, from first time buyers to investors with large property portfolios. This includes handling complex applications involving trusts, company structures and self-managed super funds. He also operates as a qualified mentor to other mortgage brokers via the FBBA mentor program.
Emmanuel Guignard