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Justin K.
Justin K.
Lindfield West, NSW

Is there an ideal time to refinance a home loan?

8 years ago


Hi Justin,

We suggest people review their lending & finance arrangements on an annual basis to ensure they have the most appropriate loan fit for their individual circumstances.

A great example of this is the client we helped in the past who was paying $395 per annum for a professional package to receive a discount on their interest rate that was only saving them $150 a year due to their low loan balance.

We have also come across clients whose fixed rate expired & the bank rolled them into a standard variable rate loan with an interest rate 1.30% higher than we were able to negotiate.

Hope this helps. Feel free to touch base if you would like to discuss further.

Hi Justin,

Great question. The ideal time to refinance is when you can save interest or if you need to restructure your loans. Competition between the lenders is high so it's worth reviewing your loan at least every 2 years.

Ideally you would have 20% equity to avoid mortgage insurance. If you were on a fixed rate it could become expensive to break the fixed rate, however, with such low interest rates it might be worth looking at the options. I have found my clients generally recover the initial cost to refinance within a few months and interest rates in the very low 4's are being achieved.

If you would like a home loan comparison to see if you can save, feel free to touch base.

Best wishes
Meiken Barnes

Hi Justin.
There is an old saying that says when the pain of changing becomes less than staying the same people change. As a borrower myself I refinanced as soon as I felt my bank did not value my business. That being when another lender offered a rate well below what my current bank had offered me.
Changing is always painful. It is human nature to avoid change. As an experienced broker I try my hardest to get as much information as possible up front from my clients to make the process as seamless as possible. In an ideal world a refinance would take 4 weeks but in reality it takes closer to 8 weeks.
The reasons for this are as varied as the number of lenders out there.
Using an experienced broker will make the process faster but you need to be willing to listen to them and provide everything they ask for.
In some cases a borrower may feel that a lender wants information that seems unnecessary but the end result is that if you provide as much information as you can up front there will be less questions during the approval process.
When is the right time to refinance? If you haven't reviewed your loan in the past 2 years the time is probably now.
I hope this helps.

Hi Justin,

There are many different situations that may trigger the need to refinance. Every loan, every person and every circumstance is different all of which generates a different "ideal" time to refinance.

It doesn't hurt to have a look at your home loan situation every two to three years. Just because you have a look at your home loan to compare doesn't mean that you will necessarily switch lenders but it's good to keep check that you still are on to a good thing.

Other ideal times to refinance may be when a fixed rate period expires, if an interest only term expires, if your equity position changes (ie you now have 20% equity so can get a cheaper rate) also when there is a period of change with rates. Last year there was a huge readjustment of rates for investment properties and it was great to compare our customers loan with what their rate was and what we could get elsewhere.

What I do know is that there is never a bad time to have a quick chat to compare your loan to the market. If you wanted to discuss your situation I'm more than happy to do so.

Have a great evening!

Hi Justin

If you have had your current loan for 2 or more years; it would be a good idea to look at what the current rates are. Get in touch with your broker (if you used one) to review the options available to you. If you didn't use a broker; feel free to contact me on 0414 727 308 for a chat.

you need to conduct an audit on your entire finance position every 12 months

this should always be with an independent broker that has complete independence

also each time your family circumstances change involve your broker asap to assess the viability of your current product selection

happy to discuss

Hi Justin,

provided you dont have a fixed rate and your loan is less than 80 percent of your house value, you can refinance any time, as there wont be any break fees or mortgage insurance to be paid again when you refinance.
Additionally, if your loan is under 2 years old and was done by a broker, they would loose at least half of their commission, as such it would be nice to give them the chance of refinancing it for you.

Hey Justin,
If your loan-to-value ratio is under 80% (which I can work out for you) and you're not locked in with a fixed rate, then it's a great time to refinance. It's always good to review your loans every 2 years.
We can refinance you with a lender that will provide you a discount for the life on the loan at a lower rate that your currently on and put more money in your pocket, towards your loan or towards a holiday ;)
If you want some quotes (obligation free) don't hesitate to ask!

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