The Australian housing market has boomed in the past 12 months, with the median house price in Brisbane increasing by
Refinance Home Loans
We can help you grow a healthier financial future by refinancing home loan.
At Borro, we understand that homeowners might choose to refinance their home loan for a variety of different reasons. Perhaps you need to consolidate personal debt. Maybe you’re planning to purchase an investment property or renovate your existing home. Or you could simply be looking to save money by switching to a more competitive interest rate. No matter the reason why, the team at Borro can help you grow a healthier financial future by refinancing home loan.
It’s a reality that everyone’s financial situation will evolve over time. What might have been right for you a year ago might not be the next. This is why we believe everybody should review their home loan interest rates annually. An annual home loan check-up will ensure you’ve still got the best mortgage product to suit your needs and that you’ve still got a competitive interest rate. By regularly reviewing your home loan, we can potentially save you thousands of dollars in interest while also keeping the loan term the same or even reducing it (so you can pay off your home and be mortgage-free even sooner!).
We can help you restructure your finances, outlining the best way for you to refinance, come out in front and achieve great savings. Begin the process of finding a better deal by contacting us today on 1300 1 borro or email
Australia’s Refinance Boom
Australia is in the midst of a refinance boom, driven by COVID-led economic uncertainty and record-low interest rates. According to data from the Australian Bureau of Statistics (ABS), lenders processed around 472,597 refinance home loans in Australia between March 2020 and March 2021. And there’s no indication that this focus on refinancing is going to end any time soon. The ABS calculated that $14.88 billion worth of refinance home loans were approved in May 2021, a 76% increase from the pre-pandemic era of March 2019.
What is Refinancing?
But what exactly is refinancing? Basically, it means taking out a new home loan to pay off your original mortgage. There are a range of reasons why borrowers choose to refinance but it’s usually because the new loan will result in a better deal for the borrower, such as a lower interest rate, better loan features or access to equity.
This renewed focus on refinancing has led to a lot of questions from homeowners in Queensland. How much can you really save by refinancing? How often should you refinance a home loan in QLD? What’s the home loan loyalty tax, and how can you escape it? And who can you trust to help you get the best possible refinance home loans in Australia?
Can Refinancing Save You from the Home Loan Loyalty Tax?
Homeowners are often encouraged to refinance home loans, but many still wonder what the big deal is. After all, the reasoning goes, if you did your homework before you took out the loan, and you know you got an excellent deal, why bother changing? The answer lies in what’s commonly referred to as the home loan loyalty tax. This term describes the higher interest rates that an existing customer is often charged compared to a new customer.
The practice of charging existing customers more was highlighted by the ACCC Home Loan Price Inquiry, which released a final report in late 2020. This report confirmed that borrowers with older home loans are paying significantly more interest than what they would be paying if they were to refinance. The older the home loan, the more a borrower can expect to save by refinancing.
What Are the Benefits of Refinancing Home Loan?
There are a number of benefits that can come with a refinance home loan in QLD. These include:
- Getting a better interest rate: Interest rates are substantially lower than they were even just 2 years ago. By refinancing, you can access a better interest rate, which could potentially save you tens of thousands of dollars over the life of your loan.
- Accessing equity: Equity is the difference between what your property is worth and how much you have remaining on your home loan. Refinancing can help you access this equity, which can then be used to fund a renovation, buy a new car or even as the deposit on an investment property purchase.
- Consolidating debt: Borrowers with high levels of personal debt may struggle to balance multiple monthly payments with cripplingly high interest rates. Refinancing will enable you to consolidate all of your debt, resulting in a single, manageable repayment and the lowest possible interest rate.
- Accessing better loan features: Many borrowers find that their financial situation changes over time. The loan features that you chose as a first home buyer may no longer be suitable, and a lack of features could actually be holding you back from reaching your financial goals. When refinancing, you’ll be able to choose a loan product that includes the most suitable features for your current situation.
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Whether you’re a…
- Homeowner who wants to refinance to a more competitive interest rate
- Home upgrader seeking finance solutions for a second home purchase
- Aspiring business owner seeking start-up capital
- Owner of an established business looking for finance or cash flow options
- First home buyer looking for an affordable home loan
Borro can provide the tools, services and support that you need to achieve your financial goals.
Mortgage and Refinance Calculators
At Borro, we have a number of buying and selling house calculators that can give you estimates of how much you can borrow, how much you’ll need for a deposit, and comparisons between loans.
We compare all loans across a large panel of 50+ lenders to find the right solution for you. Our Finance specialists are experienced in all types of loans, ranging from home loans to personal loans through to asset and commercial loans, offering you a comprehensive range of options to help you borrow money.
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Frequently Asked Questions For Refinancing Your Home Loan
At Borro we understand that homeowners choose to refinance their mortgage for different reasons. It might be to consolidate debt, purchase an investment property, renovate your existing home, or maybe you are simply looking for a lower interest rate. No matter the reason we can help you grow a healthier financial future by refinancing home loan.
The ACCC Home Loan Price Inquiry report recommended that lenders prompt borrowers to consider refinancing every 3 years. However, we believe that a reassessment should be carried out once a year for maximum benefit. This doesn’t mean that you need to do a complete refinance every 12 months. But a reassessment completed by an experienced mortgage broker will tell you if your home loan is still offering a competitive interest rate or whether you would be better off refinancing. Additionally, it’s important to do a home loan reassessment whenever you’re approaching the end of a fixed interest rate period. This is because most lenders will automatically roll a home loan over to their standard variable rate once the fixed rate term has concluded (which may be significantly higher than your current low fixed rate).
Many homeowners are wondering if now is a good time to refinance home loans in Australia. For most, the answer will be “yes” if you’ve had your current home loan for 2 years or more. The official RBA cash rate has been sitting at just 0.10% for over 7 months, which has resulted in lenders dropping their interest rates to remain competitive. How far have rates dropped? Well, the average variable home loan rate in Australia is now 106 basis points lower than it was in June 2019. While most interest rates in 2018/2019 began with a 4, many fixed interest rates now start with a 2, and some lenders are offering interest rates as low as 1.99%!
Meanwhile, property prices in South-East Queensland have been steadily rising as interstate migration increases demand in the local property market. This means that many homeowners will now have more equity, which puts them in a stronger refinancing position.
If you’re considering refinancing your home loan, start by talking to a mortgage broker at Borro. That will allow you to explain what you hope to achieve from your refinance and get expert answers to any questions that you may have. We can then assess your current home loan and compare it with a wide range of mortgage products from a diverse panel of lenders. Once we’ve identified which home loan product will present you with the best possible results, we can then get started on your refinance application.
The process of refinancing is similar to what you would have experienced when you applied for your original home loan. The new lender will want to see evidence of your current income and living expenses, as well as recent statements from your current mortgage lender. They’ll also arrange for an evaluation of your property to determine how much equity you currently have. The good thing about refinancing is that borrowers are often in a stronger financial position than when they were first home buyers. And the stronger your financial position, the easier it is for us to negotiate better loan terms.
Once the refinance home loan has been approved, the new lender will arrange for your existing home loan to be repaid in full. You’ll then start making repayments to the new lender.
The length of time it takes to process a home loan refinance will vary depending on a range of variables, including which lender you’ve chosen and how complex your application is. Typically, to refinance a home loan in QLD will take around 4-6 weeks from start to finish. However, thanks to the ongoing ramifications of COVID (and the surge in refinance applications), most refinance applications are currently taking slightly longer to finalise (averaging around 6-8 weeks).
Some borrowers hold off on refinancing because they’re happy with their current lender and don’t like the idea of having to switch. The good news is refinancing doesn’t necessarily mean changing lenders. We can approach your current lender about refinancing your existing home loan to a product with a more competitive interest rate or with more suitable loan features. Many lenders will readily allow existing customers to refinance because it’s more economical for them to lower your rate than lose your business altogether.
Many lenders are currently offering refinance cashback deals of up to $3,000 to refinancing homeowners. For some borrowers, this will not only cover the costs associated with refinancing but also leave them with a bit of leftover cash. However, before refinancing for a cashback deal, it’s important to assess whether the loan product on offer is right for you. There’s not much point in refinancing if the loan isn’t competitive or won’t support your long term financial goals. To ensure a cashback refinance deal will be beneficial, talk to one of the experienced brokers at Borro.
According to a 2020 study by CoreData, almost 1 in 2 homeowners don’t think banks are acting in their best interests. Additionally, over half of those surveyed were sceptical about whether a bank would provide them with unbiased financial advice. Considering this is how so many homeowners feel, it’s easy to see why some may be hesitant to refinance.
Fortunately, the mortgage brokers at Borro can help. Our brokers are governed by legislation known as ‘Best Interests Duty’, which means that we are legally required to always act in the best interests of our customers. We can provide you with expert advice that is totally unbiased and tailored to suit your current financial situation. So, when you work with a broker from Borro, you can trust that you’re getting the best refinance deal to suit your needs.
The experienced team of mortgage brokers at Borro can help you successfully restructure your finances, ensuring that when you refinance, you’ll always come out in front and achieve great savings. If you’re ready to start the process of finding a better deal, then contact us today on Ph: 1300 1 BORRO or email: firstname.lastname@example.org.
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