Refinancing Loans
Carrying out a health check on your home loan helps you understand where you are today and give your finances a boost.
Did you know there’s a loyalty tax on home loans?
Everyone loves a bargain, yet many people are paying more interest than they need to on one of the most expensive purchases they’ll make: Their home. A health check is a way of evaluating the interest rate you’re paying now and how it compares to other loan products on the market. It’s a good idea to conduct these check-ups regularly, especially if you’ve had your home loan for a few years.
Once a borrower has been with an existing lender for more than 3 years, they start to pay a loyalty tax. The reason for this is because lenders are constantly campaigning for new customers and offering new customers better deals and discounts. These are not passed onto existing customers. So after some years, the reality is that your home loan rate becomes much higher relative to rates available to new customers. This is why seasoned borrowers have their home loan rates renegotiated by their brokers every 2 to 3 years with their existing lenders. And if your lender cannot match the more cost effective options being offered by other lenders, it may be worth the work involved to refinance your loan.
Refinancing also gives you the opportunity to restructure your finance and consolidate car and personal loans or credit card debt, change your loan term, or take out a different type of loan, such as a construction loan or cash release. As life goes on, our situations change, and it’s okay if you want your home loan to reflect that.
Some benefits of refinancing:
- Reducing your interest cost through a better interest rate and reduced fees
- Reducing monthly repayments
- Consolidating credit card, personal loans, car loans and other debts
- Accessing equity or a cash release for a renovation or purchase of another property
KICKSTART THE PROCESS
If you’re ready for a health check or you know you want to refinance, contact Find Your Property Finance to kickstart the process.