Refinancing your home loan or investment property mortgage can be a great way to reduce costs. Often the process can put a lot of people off, but with the support of Mint Equity, refinancing is simplified.
Your mortgage is likely to be the biggest expense you have, so making sure you have the lowest interest rate and flexibility that suits your lifestyle is incredibly important.
Why should I refinance my home loan?
Refinancing is a great option if you originally secured your home loan when interest rates were higher than what they are now. Refinancing your home loan may also enable you to access the equity in your property so that you can make improvements, extensions or renovations.
It’s important as a property owner to monitor home loan interest rates as there may be significant savings available.
Often when times are tight, families will look to reduce their household spending through groceries, electricity and holidays, and forget to look at the largest portion of spending, their mortgage. A mortgage should never be a set and forget arrangement.
How do I refinance my mortgage?
Refinancing can be a simple process with the assistance of a mortgage broker like Mint Equity. Rather than having to do all the research yourself through the internet or via your current lender, letting us know of your current interest rate and your basic terms, we can then discuss the options that will suit your lifestyle. It’s all about improving your cash flow and making sure your home loan is right for your current situation.
How much will I save by refinancing my mortgage?
How much you will save will depend on the difference between your current interest rate and the new interest rate. We’ve seen dramatic drops in interest rates even just over the last few months, so refinancing your home loan can have a significant impact on your costs.
A $500,000 home loan at an interest rate of 6% over 30 years has a monthly repayment of $2,997 with the total interest repaid over the term being $1,079,190.
However, if you secure a home loan at an interest rate of 3.64% for the same loan amount, over 30 years, then your repayments drop to $2,284 per month, and you’ll pay $322,412 in interest over the loan’s term.
Consequently, saving you $8,556 per year, or $256,778 in interest over the duration of the loan.
$500,000 home loan
When is a good time to refinance?
The best time to refinance is when interest rates are at their lowest. But it’s a little bit like filling up with petrol, you just never know when the rate has hit the bottom.
Over the last few months we’ve see interest rates drop significantly, all the way down to 3.64% on some home loans. Whilst a low interest rate is great, it isn’t available for everyone. The good news is, most lenders want your business, so with the help of a mortgage broker like Mint Equity, we can negotiate a great rate on your behalf. In some cases, we’re able to re-negotiate a better rate with your lender without the need to change lenders.
How much does it cost to refinance?
The good news is, our services are free of charge as we’re remunerated by the lender you select. And in most cases, particularly for those already on a variable interest rate, there will be minimal costs to discharge your loan.
The bad news is, for those on a fixed interest rate there may be a ‘break’ cost associated with discharging your existing loan, however, we can do all the calculations to see if it is cost effective for you to refinance even after incurring those costs. Depending on the lender, there may be establishment fees and legal costs, however often we’re able to negotiate a discount on those upfront costs for you.
Can I refinance if I have a fixed interest rate?
Yes, you can refinance if you have a fixed interest rate. However, there may be economic costs associated with refinancing out of your existing loan contract depending on how much time is remaining on the fixed interest rate arrangement. Every lender is different in how they calculate the ‘break’ cost, however it might actually be more cost effective to refinance out if it means reducing your monthly repayments significantly.
How can Mint Equity help?
We take the headache out of refinancing by assessing the best available products that fit with your lifestyle and strategy. If you’re moving from a fixed rate, we’ll make sure that it’s cost effective for you to do so and liaise with the new and old lender to ensure a smooth transition.
It’s our experience, with over 20 years in banking and credit, that enable us to give our clients the best outcome and chance of approval. In a complex lending market, it’s this experience that sets us apart from other mortgage brokers.
Frequently Asked Questions
How do I discharge my loan?
There are some financial institutions that are super-efficient at discharging loans and others that are, well, not so happy to let your business go. We take the hassle out of the process for you, and leave you to deal with all the other things you have on your list.
Can I refinance to fund a renovation?
Utilising equity and refinancing to fund a renovation is a great way to add value to your property and give you the lifestyle you’re after. We step you through the process from concept to completion and revaluing your property to access the equity.
Can I refinance to secure more funds?
We can assess your borrowing capacity to see if you qualify to borrow more money so you can use the money for a deposit on another property, home improvements or to consolidate other debt. We’ll take a look at your full position to see where you can benefit and how additional funds may improve your lifestyle.
Can I refinance my SMSF loan?
Now that more lenders are providing SMSF finance, competition is heating up. However, there are legal costs associated with SMSF borrowing, so the new interest rate would need to be significantly lower to make it worth refinancing. Depending on when you first purchased your SMSF property, interest rates may now be cheaper, so it’s worth having a chat to us about your current arrangement and see if we can improve it for you.
What is Mint Equity’s credit license number?
Credit Representative Number 460314 is authorised under Australian Credit Licence Number 389328.
What services does Mint Equity offer?
Mint Equity covers the full spectrum of property and business finance.
- residential home loans
- commercial loans
- investment property loans
- SMSF loans
- construction and development loans
- business loans
How can I make an appointment?
We can arrange appointments 7 days a week at a time that suits you and at your preferred location. You can call us on 02 4340 4847.