Have rising interest rates got you thinking about refinancing? You’re not alone.
According to PEXA’s Refinance Index, the number of homeowners switching lenders has surged across the country, with refinancing volumes increasing by 21.5% over May.
Head of Research at PEXA, Mike Gill, has said that property owners have been feeling the crunch of higher living costs due to inflation and rising interest rates. This has motivated many to review their home loan and look for a better deal.
If you’ve had your loan for more than 12 months or your financial situation has changed, it may be worth considering refinancing.
Your decision will ultimately depend on your personal situation, but common reasons for refinancing include:
- Securing a lower interest rate on your loan.
- Accessing features such as an offset account or redraw facilities.
- Accessing equity in your home to renovate, invest or travel.
- Consolidating your debts, such as a personal loan or car loan, with your mortgage to make your finances more manageable.
You need to weigh up the pros and cons to make sure refinancing is the right move for you.
One of the key factors is any upfront or ongoing cost associated with ending your current loan and switching to a new product. For example, if you’re on a fixed rate mortgage and decide to leave early, you may be charged a discharge fee and a break fee, which can be costly.
Refinancing is like applying for a home loan, as you’ll need to provide all your information and supporting documents to a lender. It can take four to six weeks to process and finalise a refinance application.
If you’re considering refinancing, make an appointment with our team. We can advise on what’s going to serve your best interests, and help find you a competitive home loan. We will also take care of the refinancing process on your behalf.