Five Compelling Arguments for Refinancing

1. Your present mortgage agreement are expiring or have expired

Therefore, you may be subject to, or already on, the Standard Variable Rate from your lender, which is often much higher than your original or fixed rate. Statistics from Experian show that over 1.5 million borrowers will be subject to their lender’s standard variable rate (SVR), which, depending on the size of your mortgage, may cost you thousands, if not tens of thousands, in additional interest.

2. Mortgage rates are rising

In the year and a half leading up to May of 2022, mortgage rates rose at their quickest rate in a decade. Since December 2021, the RBA base rate has been raised by a total of 1.25%, and more increases are widely anticipated this year. Lenders are regularly pulling the greatest offers, so it’s in your best interest to move quickly and lock in a fixed rate loan.

3. Enhanced flexibility and increased number of options

Since signing your mortgage contract, your financial circumstances might have changed, prompting you to consider making overpayments or perhaps switching to an interest-only or offset mortgage. Change to a mortgage plan that provides more leeway if you need or desire that kind of freedom.

4. Market and home price uncertainty

There is significant ambiguity as to whether home prices will decline over the next several years in certain areas of Australia, and the present view for the housing market is not very optimistic.

If you’re thinking to yourself, “Well, I’m not planning to relocate, therefore this does not affect me,” that’s OK. If you need to refinance soon but property values drop in the future, you may end up with a larger loan-to-value ratio and a more costly mortgage.

5. Capital raising on your property

Refinancing your mortgage may be a great way to get cash out of your house to make repairs or renovations that will increase its value, or to put towards the down payment on a second home or investment property.

How do you find success?

Major financial choices, like a refinance, should always be discussed with an impartial third party. We can assist you by analysing your situation and needs to determine the optimal course of action. If you’re interested in refinancing your mortgage, please contact us right away.