Key Benefits to Refinancing Your Mortgage
When buying a home, a large percentage of Australians will rely on a mortgage, which on average should be fully paid around 25-30 years time. During your repayment period, there may be some situations that will entice you to consider refinancing your loan, which means the process of changing your existing loan for a new one, commonly done with a different bank.
First of all, why should anyone who owns a mortgage consider refinancing? In summary, there will be two situations where it is a good time to refinance, which are:
When Interest Rates Are Low
When There is a Compelling Offer Available
To start things off, Xynergy Realty would like to discuss the benefits of refinancing and will discuss a limited time offer that may also interest you.
If this sounds like something you’d be interested in, make sure to read this article until the end to learn more about this opportunity!
Refinancing To Reduce Your Current Interest Rate
During the Reserve Bank of Australia’s (RBA) meeting in February 2020, the board has decided to keep the cash rate at a record low of 0.75 per cent. After the reduction, it is likely that other interest rates within the economy will follow, which stimulates borrowing and investing.
Should you have a mortgage that currently has a higher interest rate compared to another alternative, perhaps you should consider refinancing to secure a lower interest rate that may help lessen the amount of interest payments significantly.
Research shows that these days lenders simply offer new clients better deals rather than rewarding loyalty. In fact, if your mortgage went for more than two years you are actually paying at an uncompetitive interest rate. By refinancing your loan, you can find a bank with much better interest rates, especially with the current situation in Melbourne. According to Investopedia, the unwritten rule is to proceed with refinancing if your interest rate can drop by 2%, and lenders will also recommend considering even with 1 per cent savings.
Besides the above, reducing your interest rate will also support you in the rate of building equity in your home, which will significantly decrease the size of your monthly repayments. An example made by Investopedia elaborates how a 9% interest rate applied to a 30-year fixed-rate mortgage of $100,000 includes a principal and interest payment of $804.62. On the other hand, if the interest rate is 4.5%, the same loan would include repayments of $506.69 instead.
Changing the Duration of the Mortgage
Besides reducing repayments, If you are able to secure a lower interest rate, it is recommended to secure a shorter term on your mortgage with slightly higher monthly repayments.
If you are currently on a 30-year fixed-rate mortgage, should you find a bank that has a lower interest rate, you may want to consider changing it to 15 years or less. Even though the monthly repayments are higher, you will still pay less interest in the long run.
Have Multiple Loans? Consider Consolidating Your Loans!
If you are that type of person who has multiple credit cards with very high-interest rates, refinancing can be a good step as it can consolidate your other loans and debts so you can have a single and more affordable payment. By having only one loan, it makes it much easier to keep track of your payments. However, you should also consider the new loan term and how much the final interest will cost after you consolidated everything.
Changes in Your Home
Property prices in Australia are something that is constantly fluctuating. If your property’s price has increased over time, it might be wise to refinance and get a better rate. This also applies if you’re planning to do some house renovations, whether it is something simple like repainting the walls or even more bigger renovations like adding an extra level in your house.
Now that we’ve explained some of the key benefits of refinancing, you might be wondering if this is enough to support your decision to refinance. Lucky for you, we have a special offer specifically tailored for our clients, which are:
$2,000 Bonus For Every Additional Property*
Ends 31 March 2020
*Terms and conditions apply
Now that interest rates are low, Xynergy Realty also has a compelling offer to our clients that currently have a mortgage to take advantage of this opportunity. By refinancing your mortgage, you will be able to obtain a $4,000 cashback if you apply by 31 March 2020.
If this is an opportunity that interests you, please contact firstname.lastname@example.org to discuss the next steps.
To view the full terms and conditions, please click here