Home loan Refinance

Home loan Refinance

Is refinancing worth it?

Refinancing your home loan can result in considerable long-term savings, but it largely depends on your personal situation and current home loan.

For example, say you are currently paying five percent interest per annum on a $500,000 home loan and refinance to a lender offering a four percent interest rate per annum.

Considering the fees involved in refinancing – including a valuation fee, application fee, registration of mortgage fee and a discharge of mortgage fee – you could still save up to $5000 in interest a year. In the first year alone you’d easily make back any exit or set-up fees you’ll pay to refinance, not to mention the long-term savings you could benefit from.

Another way refinancing could save you money is if you are paying high interest rates on multiple credit cards and you consolidate all your debt into a single refinanced home loan at a lower interest rate.

It’s a good idea to review your home loan every 12 months or so to make sure it’s still meeting your needs. Just remember to carefully weigh up the potential long-term savings versus any fees you may incur.