RBA Cash Rate Rise and What It Means for You24 June 2022
Why Use a Mortgage Broker to Refinance24 June 2022
Have you been with the same lender for quite a long time? If you have been, chances are you might be missing some opportunities to access other deals that may be better suited for your needs and circumstances.
Some lenders offer better rates than others. Plus, they may also provide some money-saving features like offset accounts and redraw facilities. This is why it is a good practice to review your home loan to take advantage of the many benefits refinancing may offer.
To help you decide whether it’s time to consider refinancing, here are some signs to look out for.
Your LVR is less than 80%
LVR or Loan-to-Value Ratio is calculated by the amount you are borrowing divided by the lender’s assessed value of the property.
Generally, lenders offer better rates to borrowers who have an 80% LVR. The cost of getting a home loan may increase when the LVR is higher than 80% as it will incur Lender’s Mortgage Insurance (LMI). If your LVR is less than 80%, refinancing may be a good option for you.
Let’s look at this scenario for example.
Bob purchased a property at $300,000 with a loan of $285,000. The original LVR was 95%. Since the property value has increased to $350,000 and the loan balance is now $262,000, his current LVR is 75%. With his new LVR, it’s a good time for him to refinance his loans.
Your personal circumstances have changed
Changes in your personal circumstances can also be a sign you need to review your home loan, whether they be good or bad. Perhaps there are changes in your income. Are you earning more money? Did your partner get a new job? Have your living expenses changed? Take these elements into consideration when choosing the right home loan for your needs.
Your fixed interest loan term is ending
If your fixed interest loan term is about to close, it may revert to a standard variable rate. Fixed-term rates are often lower for the fixed period than a standard variable rate. So it’s a good time to consider refinancing so as to get a more competitive rate.
Interest rates are changing
The Reserve Bank has increased cash rates to 0.85% and this rate is expected to rise further by year-end. With cash rates increasing, interest rates may also be moving. Now is the time to look into your home loan and assess other options available to you to ensure you’re getting the best possible deal.
You’re drowning in debt payments
Are you struggling to cover multiple debt payments? Refinancing allows you to consolidate your debts to help you manage them better. When you refinance your mortgage, you may use some of your equity to pay off your other debts. This allows you to spread the repayments so they’re more affordable.
Refinancing can truly offer benefits for you depending on your circumstances. If you think it’s time to refinance your mortgage, talk to a trusted broker so they can assess the right refinancing options that suit you.
Condon Noller has access to a wide network of lenders. Reach out to us and let’s discuss your needs and current situation so we can get the best deal for you. Request a callback from our finance team today.