The benefits of refinancing your home loan

Is refinancing your home worth it?

We get it, interest rates can be confusing and seem to be changing all the time. Constantly having to check if you could be getting a better rate is frustrating and it’s no surprise most Aussies avoid it. Recent research from our Know Your Numbers report shows that 75% of borrowers don’t know their interest rate – and many of these people could be getting a better deal.

If you’ve had your mortgage for more than 12 months, you could save up to five-figures over the term of your loan simply by switching providers. That extra cash could be a holiday, a new car or an emergency fund for a rainy day. So yeah, we’d say the pros of refinancing could be worth it.

When should you refinance your home?

First of all, make sure you know what your interest rate is. You should be able to find it in your online banking app or by contacting your bank.

If this is you, find out how much you still owe on your loan and whether you have a fixed or variable rate. Once you have this info, use our home loan calculator to estimate how much you could be saving.

Can I refinance my home loan to access equity?

If you’re looking to renovate or make a big-ticket purchase, one of the pros of refinancing is tapping into your home equity to access additional funds. We know home renos can be expensive and this could be a con if you don’t have the cash upfront. In this case, refinancing is a great way to access equity already in your property.

Tips for making the big switch

You already nailed your home loan application, so the refinancing process should be a breeze. And this time you won’t have to worry about strata reports, pest inspections, open houses and auctions. #blessed

Here are some pros, cons and things to prepare for:

1. If you’re switching banks, you’ll need to provide existing home loan statements and evidence of ownership. These documents will show how much you still owe on your loan and that you’re a total pro at paying it back.
    
2. You’ll need to provide recent payslips, any alternative income statements, identification documents and credit card statements. If you have any outstanding debts, it’s a good idea to streamline your debt and consolidate what’s left.
   
   
3. Check if your current lender charges an exit or break cost (we don’t!). This info should be available online, but if you have no luck, drop them a line.
   
   
4. Make sure the new rate is for the long term and not just a honeymoon period.
   
   
5. Interest rates are just half the story because they don’t factor in bank fees. We don’t charge any fees*, but with other banks, you could be paying close to $3,000. To find out the true cost of a loan, check out the comparison rate.
   
   
6. Ultimately, you need to weigh up the costs and benefits.

Refinancing with UBank

Along with our award-winning home loans** and competitive rates, we also offer unlimited redraws on our variable home loans and the ability to manage your loan online.

You’ll also get access to Tracker, our easy-to-use online application tool that’ll have your new home loan sorted in no time!

So, what are you waiting for? Find out if you could be saving stacks of cash by simply switching banks and starting your refinancing journey today.

* UBank charges zero fees for variable rate loans, however there is a one-off fee if you decide to select a fixed rate loan.

** Winner of Canstar’s 2019 Bank of the Year Award and four Mozo Expert Choice Awards 2019 for variable and fixed rate discount offers.