Thinking about refinancing your home loan but are unsure whether you should?

People refinance their home loan for a variety of reasons.

Whether it’s to lower their repayments, pay off their home sooner, or to finance an extension. Whatever the reason, it’s worth taking a closer look at your current loan and whether a different home lender may offer a product more suited to you and your lifestyle.

Here are six reasons you may want to refinance:

• Obtain a cheaper interest rate
• Shorten the term of your loan
• Gain access to new home loan features
• Switch from a variable to a fixed rate home loan
• Your fixed rate loan is coming to an end
• In conjunction with another borrowing purpose

Obtain a cheaper interest rate

A great way of saving money over the life of your home loan is by finding a lower interest rate.

This could also have the added benefit of lowering your monthly repayment as well.

Of course, you would need to consider the costs of changing your home loan to make sure it was beneficial.

Shorten the term of your loan

If your budget allows it, it may be worth considering shortening the term of your loan so you can pay it off sooner and reduce the interest payments over the life of the loan.

Using our Home Loan Repayments Calculator, reducing a $250,000 loan from 30 years down to 20 years would increase your fortnightly repayments by $144 (from $597 to $741), but would reduce your interest payments by $80,000 and you would own your home 10 years earlier!

Of course, you should consider your own circumstances when considering options such as these.

Gain access to new home loan features

Home loans are not all about the interest rate.

There are many features and benefits you can gain from a home loan, especially with home loan packages.

For example, our Ultimate Home Loan comes with a free mortgage offset account, free online redraw facility, additional payments made without penalty, choice of payment periods, 10% discount on home & contents insurance, and special rates on overdrafts.

When considering your new home loan it may be worth looking at the whole package of benefits you receive from it.

Switch from a variable to a fixed rate home loan

You may wish to fix all or part of your home loan to take advantage of low interest rates.

This is something you would need to discuss with one of our loan experts, but it is something that may save you money over the life of your loan.

It also allows you to set your budget in advance, knowing how much your repayments will be, even if interest rates rise.

Your fixed rate loan is coming to an end

Sometimes the break costs associated with refinancing home loans during a fixed rate period don’t make switching your home loan a financially sensible thing to do.

However, when your fixed rate period comes to an end, you may want to start looking around for a new home loan.

This is a perfect time to talk to one of our lending specialists to see what your options are and whether you want to keep your loan fixed or switch it to a variable rate.

In conjunction with another borrowing purpose

Sometimes you may want to raise money for a car purchase, renovating your home, or paying off some credit card debts.

Rolling these into a new home loan may be an effective way of achieving it.

Your choice

As you can see, there are a number of reasons you may want to refinance your home loan.

Regardless of your reason however, it may be worth talking to one of our home lending specialists so you can make the best decision based on your own circumstances.