What are the benefits of refinancing?
Thinking about refinancing? Learn how it can lower repayments, reduce interest, and help you pay off your home loan faster.
Thinking about refinancing your home loan and want to know the benefits? Refinancing your home loan may help you save money, pay off your existing loan sooner or tap into equity.
1. Securing a lower interest rate
One of the reasons homeowners may choose to refinance is to secure a lower interest rate. Paying a lower interest rate means that your fortnightly or monthly home loan repayments will decrease, helping you save.
2. Reducing bank fees
Another reason for home loans refinancing is to save on those pesky account fees. Although it might not seem like much, these fees can add up over the life of the loan.
3. Consolidating debt
If you have a bunch of different loans that are charging a higher interest rate than your home loan, it could be worth refinancing and rolling your debt into a single home loan. That way you can benefit from the single, lower interest rate through debt consolidation.
4. Tapping into equity
As you make monthly repayments and slowly chip away at the principal of your home loan, the equity in your property will increase. Refinancing gives you access to the equity that you've built up so you can put the money towards expenses like renovations, a holiday or a down payment towards a new home or investment property.
5. Accessing new features
In some cases, refinancing to a different lender might give you access to a whole bunch of different loan features. From offset accounts to redraw facilities or just the opportunity to make additional mortgage repayments without being penalised. These kinds of features can help you save on interest rates and potentially pay off your mortgage quicker when put to good use.
6. Reducing your loan term
Lastly, refinancing could allow you to switch to a different home loan with a shorter term without impacting your repayments too much.
Ready to refinance? Read our six step guide to refinancing and learn about how it works.
Unloan is a division of Commonwealth Bank of Australia.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Tax law is complex and subject to change. For the latest information, check the ATO website or with your accountant or financial advisor.
Unloan is a division of Commonwealth Bank of Australia is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions are found on our Unloan Terms and Conditions. Modified Terms and Conditions will be set out in our Notice of Variation Agreement, if you are approved. This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.
