Mortgage refinancing your home loan

Mortgage refinancing utilises the existing equity available in your property to repay other high interest debts. It may allow you to package your current monthly repayments from all of your debts into one convenient repayment. This also means that you end up paying less each month than what you currently would be paying.

Before you refinance your home loan, please speak with one of the mortgage brokers at Intellichoice first. Everyone's personal financial situation is unique and we recommend that you seek professional financial advice first. Our mortgage brokers will need to assess your situation first, so we can provide you with a financial product that suits your needs and current circumstances.

How does a home loan refinance work?

Home loan refinancing is the process of applying for a new home loan on your current property and using this new home loan to pay out your current mortgage and any other debts you may have.

Benefits of refinancing your home loan

The benefits of a home loan refinance include:

• paying off your home loan faster
• extending the length of your home loan and thereby reducing the amount you repay each month.
• a lower interest rate or more favourable home loan terms than your current home loan
• ability to consolidate debt, for example, your credit cards and personal loans into your home loan to take advantage of the lower interest rate
• drawing additional funds against your property for expenses of a personal nature

Consolidate debt through a home loan refinance

Home loan refinancing is often used to consolidate credit card and personal loan debt. This is because the interest rate on a home loan is usually available at a substantially lower interest rate than the interest rate you pay on your credit cards or personal loans.

By consolidating all your debts under your home loan, you will only have to make a single payment instead of making multiple payments each month. In addition, you may end up paying less each month than you are currently paying and this will help you to manage your finances more effectively.

Applying for a home loan refinance

When applying for a home loan refinance, make sure:

• You are fully informed and understand the terms and conditions, features and benefits, repayment amount, home loan terms, additional fees etc
• Your repayments have been reduced - not increased
• There are no hidden fees or costs
• You have achieved control over all your debts
• There is a real long term benefit to you

If you have any questions, or if you are unsure if home loan refinancing is right for you, please speak to the mortgage brokers at Intellichoice first on 1300 55 10 45 and we will work out with you what product best suits your financial circumstances.