Refinancing a Loan

Refinancing Options

Refinancing your mortgage could allow you to access cheaper interest rates, new options such as offset accounts or even allow you to unlock additional equity in your home to renovate, buy an investment property or consolidate debt. The most important thing to review when considering refinancing is to identify if there is enough equity available in your property to go ahead. Secondly, a review of your credit history will also be required, so make sure it is in good shape. Thirdly, do the sums carefully (see Refinancing - What are the Costs of Changing from one loan to another?).

Why Refinance?

People usually want to change loans when they are refinancing or consolidating their debts. Typically they are refinancing to:

• Borrow more money to renovate, invest or for business
• Consolidate separate loans (car, personal, business)
• Take advantage of lower priced loans or better structured loans in the market

Review your position every two years

If you already have a mortgage, you should review your entire finance position every couple of years. If you simply suspect you could be getting a better deal, or a fixed-rate loan term is coming to an end, you definitely should check out your options. You can easily do that confidentially by talking to your local mortgage broker.

The Costs of changing from one loan to another

One of the major decisions in refinancing is the cost. Know the cost and do the sums; when you refinance, be prepared for the fact that it nearly always costs you money at the start - to exit your current loan and set up a new one.  Costs can range from minimal to thousands of dollars, depending on the circumstances surrounding you change.

"Lee Banh made restructuring my loans, while making a family purchase simple. Something my current lender couldn't accommodate." James S, St Johns Park, NSW

Bank/Lender fees to watch out for

Apart from discharge fees, some loans do have exit penalties or deferred loan establishment fees. You can pretty much bet that, if your loan had some kind of up-front rate discount or very low interest rate, there will be exit fees. Costs to change could be minimal under a number of good circumstances, especially if the new loan is with the same lender and the amount is the same, with minimal structural changes. Do the sums under Refinancing - What are the Costs of Changing from one loan to another?

Assess your situation confidentially with a professional

If you are concerned or not sure, the first thing to do is assess your options thoroughly with someone who understands your situation. Talk to your accountant, then talk to your local mortgage broker. A good mortgage broker will have loans assessment software and they will be able to use their technology to do the sums for you.

Accessing your equity

You may be able to access equity in your existing property/s to fund investment or to renovate a property, and this can involve some form of refinancing your current mortgage. You can find out more about accessing your equity and borrowing to renvovate through our sister company, Loan Market.


More Information & x inc service guarantee

The home loan market is very competitive. There are literally thousands of home loan options to choose from and the fastest way to get to the best decision for you is to get assistance. As the only national mortgage brokers with ISO 9000 Quality accreditation, X Inc offers you our service guarantee.  ISO ensures we have the right customer service standards and processes in place to be certain that we are doing the right thing by every Customer.  Make an appointment or talk to a local mortgage broker before making a final decision.  

Alternatively, please call at any time on 13 XINC (+61 2 9018 8417 for overseas callers) or contact us via email and we will return your call within 2 business hours.