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Why do people refinance their loan?

Why and How to Refinance Your Home Loan. The ABS says that several billion dollars of home loan commitments are refinanced in Australia each month. Find out why at CANSTAR.

Refinancing a home loan is popular, as people juggle their finances to take advantage of competitive interest rates and hopefully, pay off their mortgage sooner. But there are a few important points to consider in the reasons to refinance.

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Reason to refinance: Why do people refinance their home loan?

Bankwest logoCANSTAR caught up with Bankwest General Manager, Products & Marketing, Jason Chan for some advice on the why and how of home loan refinancing.

 

Q: In your experience, what are some of the main reasons for people to want to refinance their home loan?

A: Home loan refinancing can be influenced by various factors including a customer’s particular stage in life, such as starting a family or downsizing the family home, as well as the specific product attributes and service quality they receive from their current lender.

It is a good idea to periodically review your current home lending arrangements to ensure they still meet your requirements, especially if your situation or circumstances change.

Friends and family, who are also Bankwest customers, often make recommendations based on their own positive experience and service received from Bankwest. We’re committed to making banking easier, including attractive refinancing options for new and existing home loan customers – it’s all part of Happy Banking.

 

Q: Is there any paperwork home loan refinance applicants should prepare before making the application?

A: A current statement of their position is important, including income and expenses.

If refinancing, statements from their current home loan, proof of income and an estimate of what they feel they can afford each month are also required.

 

Q: If the home loan refinance is for debt consolidation, how should applicants structure their loan to avoid paying more in the long term?

A: If refinancing to consolidate debt, a reduced loan term that is affordable while allowing for maximum interest savings could be beneficial. For certainty of repayments, a fixed rate should also be considered.

 

Q: A home loan can be a set and forget type of cost – is it worthwhile for mortgage holders to review their loan on a regular basis?

A: It is a good idea to periodically review your current home lending arrangements to ensure they still meet your requirements. Remember to review all aspects of the package and not just the interest rate.

 

Other common home loan refinance questions

Plenty of visitors to CANSTAR’s home loan pages are interested in finding out more about the refinancing process and the possible costs involved. Some common questions include the following:

Other common home loan refinance questions

What does it cost to refinance a home loan?

What is a mortgage broker?

What are home loan break costs?

What other home loan fees might I have?

What is a comparison rate?

What is Lender’s Mortgage Insurance?

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