When Should I Refinance My Mortgage?
Heard about mortgage refinancing? These days, people refinance their mortgage much more frequently, resulting in the average duration of a home loan in Australia being only 4 years. Here are our top 4 reasons to refinance your mortgage:
Reason 1: Lower Rate
The most common reason for people to refinance their mortgage is to get a better deal. But be careful you don’t become interest rate-fixated. When you refinance your home loan, you need to consider fees and charges as well as the interest rate. You need to be sure that in refinancing your home loan that you’ll be better off in the long run after taking into account all costs. If you are considering a refinance now, KBRZ offers a wide range of choices with very low interest rates that are tailored just for you.
Reason 2: More Flexibility
Many people only discover the full details about their mortgage when it’s too late. They try to do something and get told by their lender that either they can’t do it, or they will incur a hefty charge if they do. Hence, many people refinance their mortgage to give themselves increased flexibility.
Reason 3: Home Equity
Over recent years in the property market, houses have appreciated at a significant rate. e.g. a home you bought for $300,000 five years ago, might now be worth $500,000. Refinancing your mortgage with a home equity loan might let you tap into that extra $200,000 equity.
Reason 4: Renovation
If you carry out renovations, it often makes sense to refinance your mortgage and take out a construction loan so you only pay interest as the building progresses. Once construction is over, it might make sense to refinance your home loan again so that you consolidate the total amount you owe into a loan that minimises your interest bill, while giving you a degree of liquidity.
Please feel free to contact us if you have any other questions, or want to further discuss mortgage refinancing. It is worthwhile to consolidate with our team at KBRZ in order to find the most optimal solution for you that will allow you to save a good portion of your wealth.