If you’re a homeowner considering a home loan refinance, now could be the perfect time to do so. With interest rates at their lowest in nearly 50 years, you can lock in a lower rate for years to come.
Check out these five reasons why it might be an excellent option to refinance a home loan:
Lower interest rate
The average 30-year fixed mortgage rate is currently close to 4% in Australia, which is at a historic low. However, interest rates will likely rise, so it makes sense to lock in that low rate now if you can. How much you can save depends on how much you currently pay and your new interest rate.
Consolidate debts
Consolidating your loans into a single debt can help you pay off debts faster and save money. It can also improve your credit score, leading to a better rate on future borrowing. This is why the decision to refinance a home loan could be an excellent financial decision.
Improve your cash flow
- Save money by paying off your loan faster. When you refinance, you can often lower the interest rate on your mortgage and extend the loan term. This means you’ll pay less in interest (per month), which means more money in your pocket!
- Pay less each month. By extending a loan term, you will end up paying fewer monthly payments.
- Pay off your debt sooner than expected! If you have been considering paying off all or part of your home equity line before retirement age (or any other time), now may be an opportune moment for doing so and saving money on interest charges throughout those years.
Repay your loan faster
The most obvious benefit of a home refinance is that you can repay your loan sooner. This can help you achieve important financial goals, like saving for retirement or paying off college loans.
It also means that you’ll pay less interest over the life of your loan since you’ll be making higher monthly payments and paying more principal each month.
This results in a lower overall cost on your loan and can save thousands of dollars in interest charges over time.
Better product choice and service
As you are probably aware, many home loans are on offer today. There are fixed interest rates, variable rates and discounts for early repayment; redraw facilities; offset accounts; and many more features that can be combined to suit your needs.
The best way to get all these options is by talking to a broker or mortgage adviser. They’ll be able to search through banks and lenders’ websites for the most suitable product based on your circumstances, including:
Now could be a great time to refinance with low-interest rates.
You may have been considering refinancing your home but haven’t taken the plunge yet. Lenders are offering low-interest rates, and many are also providing low fees. Now could be a great time to refinance! Hence, experts suggest that it is an excellent time to go for refinancing.
There are many benefits to refinancing your home loan, including:
- Lower monthly payments
- Better interest rate options
- The ability to consolidate debt
Conclusion
If you’re considering refinancing your home loan, it could be a great time to do it. Interest rates are still low, and lenders are more willing than ever to help borrowers who might otherwise be ‘too risky’. You can search online for various alternatives and refinancing options.