Refinance Home Loan Calculator

What is refinancing and why should I do it?

As refinancing really only refers to moving your loan to another lender. The alternative would be negotiating your existing loan with your current lender. An internal refinance with your same lender would only be used for changes to the title (ie, adding a borrower).

There are many reasons why you might decide to refinance your mortgage, for example:

• To get lower interest rates
• To access additional loan features such as an offset sub-account or redraw facility
• To gain equity
• To consolidate debts

What to do I do before I refinance?

Before you refinance your home loan, you need to think about what you want to achieve. Do you want lower interest rates, access to additional loan features, to access equity, or consolidate debt? Once you’ve narrowed down what you want, it will be easier to find a new lender or loan product that will suit your current needs.

You should also calculate the costs of refinancing to see if it makes financial sense to make the switch. Depending on your lender, you may incur exit or discharge fees for refinancing, and you may be charged upfront, application or valuation fees with your new lender. If it costs more to refinance than you’ll save by refinancing, then it may not be worth making the switch.

It’s also a good idea to compare home loans to see if your new loan is better than your current loan to see if your new loan has more benefits OR suits you better than your current loan

Before you commit to changing lenders, chat to your current lender first. They don’t want to lose you as a customer, so they might be able to offer you a lower rate or additional features.

Should I use a broker or go direct to the lender?

When you refinance, you can either go directly to the lender or bank yourself, or you can choose to use a mortgage broker. If you choose to refinance yourself, you will need to do all the research to find your new lender, whereas a broker will do all the hard work for you, and might even be able to secure you a better deal on your new home loan. With this being said, a broker will likely charge you a fee for their work, whereas doing your own research is free. Choosing whether to use a broker or find a new loan yourself is completely up to you, and depends on your preferences and time restrictions.

When should I refinance?

There are no rules on when you should refinance, however there are suggestions you can follow depending on what type of home loan you currently have. If you have a variable home loan, many people consider refinancing every three or four years, if your current loan no longer meets your needs. In this time, your loan balance will reduce and your property value will (likely) increase, which appeals to lenders and puts you in a good position to get a better rate.

If you have a fixed rate home loan, you can still refinance during the fixed rate period. It’s suggested you wait until the end of the fixed term before you refinance to avoid extra break costs or exit fees, however, if your new loan product will save you significant money, it may be worth paying the fixed rate break costs and switching during the fixed period.

How do I refinance?

After you’ve done your research and have found a new loan product, it’s time to apply. Applying when refinancing is similar to applying for the initial loan - you’ll need to fill out paperwork, provide supporting documents and identification, and will be examined by the lender. Your new lender will arrange for your property to be valued, even if you had a valuation when you first purchased the property. This is because your property value will have likely changed from the time you applied for the initial loan. Once the lender has assessed your application, you may be approved.