Home loan refinance
Refinance your home loan with a better deal from over 25 premium home lenders
Compare and save again with home loan refinancing
Want to save thousands on your home loan? Refinance your home loan today
Are you paying too much in interest?
According to a recent survey, only 17% of Australian homeowners have refinanced their home loan in the last two to three years. According to the ABS, the number is declining by 0.7% from January to February 2017!
What’s even more troubling is that 40% of Australians have never refinanced their home loan. Australia is now experiencing historic low interest rates. That means there has never been a better time to refinance your home loan.
When you refinance, you’re opening yourself up to new opportunities to save. Switch to a lower rate home loan, or a home loan with an offset account so you can save even more on interest. Choose from over 25 of Australia’s top lenders, all competing for your business.
With home loan refinancing, you can slash years off your home loan and save yourself thousands in interest repayments.
Simple, straightforward refinancing
Many homeowners are reluctant to refinance because they believe it’s like applying for a home loan all over again. Endless meetings, paperwork, research – it’s all too much hassle! We understand your frustration, especially if you’ve gone through it in the past couple of years. However, refinancing your home with a qualified, expert broker guiding you through makes the process easier.
Refinancing is simple when you have Savvy on your side. Our consultants take care of you through the entire refinancing process. There’s no running around and you won’t have to spend countless hours in front of a computer screen crunching interest rates and comparison rates. Your dedicated consultant takes care of the process and explains everything to you in easy to understand terms.
If you’re having bad credit history, Savvy can also help. If you’ve made headway in correcting your credit, we can find a better home loan at a more competitive rate.
Calculate and save by comparing home loans
Compare hundreds of loan products for you to make the right choice and refinance with a better rate today. Use our comprehensive home loan calculator to workout your monthly repayments and find a better deal from over 25 premium home lenders.
| Lender | Product Name | Advertised Rate | Comparison Rate | Monthly Repayment |
|---|---|---|---|---|
| Savvy | Variable Refinance Loan | 3.89% fixed | 3.91% | $551.01 |
| GreaterBank | Great Rate Variable Home | 3.89% variable | 3.89% | $551.01 |
| Macquarie | Basic Variable Home Loan | 3.89% variable | 3.89% | $551.01 |
| AMP | Essential Home Loan | 3.89% variable | 3.91% | $551.01 |
| Bank of Australia | Premium Home Loan Fixed 3 Years | 3.94% fixed - 3 yrs | 4.63% | $551.68 |
| IMB | Essentials Investment Loan | 4.09% variable | 4.09% | $553.71 |
| CBA | Fixed Rate Home Loan 3 Years | 4.24% fixed - 3 yrs | 5.10% | $555.75 |
| ANZ | ANZ Standard Variable Home Loan | 4.35 - 4.50% fixed - 2 yrs | 4.74 - 4.89% | $557.25 |
| Westpac | SMSF Investment Property Loan Fixed 2 Years | 4.99% fixed - 2 yrs | 5.66% | $566.00 |
Home loan refinance explained
Everything you need to know about home loan refinance, including how the process works, and how to compare mortgage interest rates, fees, and terms online
How does home loan refinance work?
It’s beneficial to periodically refinance your home loan as circumstances change. Many things affect interest rates, and when they change, it has implications for how much our home loans cost from month to month – but also across the lifetime of the term.
Refinancing your mortgage is relatively straightforward. You can use Savvy to compare the hundreds of home loan options out there with your existing deal. Once you’ve chosen a new option, the lender you switch to discharges your current mortgage, and then your home becomes security for a new loan with terms that better suit where you’re at right now.
Apart from getting a better interest rate and terms, homeowners utilise a switch from one home loan provider to another for many different things. That might be to pay for home improvements, buy a car, or to pay off costly debts like credit cards or unsecured finance. Some borrowers switch to a longer-term to get lower regular mortgage repayments when their financial situation changes, while others actually shorten their loan.
Why would I refinance my home loan?
There are many good reasons home owners might benefit from switching their mortgage:
Refinancing to save on repayments
A lot of Australian families are curious about refinancing their home loans. A fair proportion of those people often wonder – how much is this actually going to save me? Surely, we are only talking about a few dollars here and there? Yet, that couldn’t be further from the truth! A recent study by the Australian Bureau of Statistics found the national average saved as a result of refinancing is $259 per month.
It’s a sizeable sum, but it becomes even more significant given the relatively long time a mortgage runs. In the following example, just half a percent makes a difference of more than $36,000 and $100 each month during a 30-year $400,000 loan:
| Interest rate | Term | Monthly | Total cost |
|---|---|---|---|
|
2.5% |
30 years |
$1,580.48 |
$568,974.09 |
|
2% |
30 years |
$1,478.48 |
$532,252.04 |
Refinancing to pay for property investment
When thinking about home loan refinance, you could be considering buying another property at the same time. Suppose your loan-to-value ratio is reasonable. In that case, a bank or lender may agree to extend your mortgage to cover an investment property. Not only that, but if you currently have enough equity in your home, you can use that to provide the deposit for a second home or investment property, without dipping into your savings. Combine refinancing with an offset account that makes best use of your savings, and you could improve your financial situation massively overnight.
Refinancing to improve your home
Using a home loan refinance to pay for renovations at your property often makes sound financial sense. It can be far cheaper to borrow extra funds via your mortgage than to raise money using unsecured finance like a personal loan, for instance. If you plan to renovate or extend your home, you can refinance with another lender or source a different mortgage with your existing one.
Refinancing a home loan for debt consolidation
Many of us accumulate smaller debts like credit cards and car loans over a period of time. You might find it makes sound financial sense to use lower home loan rates to get rid of some of that costlier debt. Credit cards can be especially harsh when it comes to the cost of servicing debt – often having an interest rate in excess of 20%. Even personal loans can’t compete with home loan interest rates, so refinancing to consolidate debt is usually an excellent idea.
How do I compare home loan refinance options and rates?
Once you’ve decided to refinance, it’s essential you compare as many home loan options as you can.
You can use Savvy’s tables to quickly compare lender offers, fees, and rates. You’ll find two rates for each loan. One is the interest rate and the other is the
comparison rate, which includes any basic fees associated with the product. It’s a great way to quickly compare the merits and drawbacks of each lender and mortgage. Loan providers differ, so you’ll find various fees within relatively broad ranges:
| Interest rate | Term |
|---|---|
|
Application fee - $150 - $750 |
Most home loans come with a one-off establishment or setup fee. |
|
Account fees - $5 - $20 per month |
Remember that account fees can equal a lot over the course of a mortgage. Consider that a monthly $15 fee adds up to $5,400 over twenty-five years. |
|
Discharge fee - $250 - $500 |
You’ll usually need to deal with this fee if you pay down early or refinance your home loan. |
|
Break fee - varies |
Break fees only apply to fixed-rate periods or home loans that date back to before 2011, when there was a rule change. The amount you pay gets based on everything from how much the lender is currently paying to borrow money wholesale (and that often changes daily) to how long you’ve got left on your fixed-rate period (the shorter, the better for you) and how much you initially borrowed plus the fixed rate itself. |
A comparison rate is only a part of the equation when you’re trying to find the best home loan refinance deal:
- Remember that a comparison rate can’t include things like discharge and break fees – just regular account and setup charges.
- You’ll also need to consider any additional objectives you have – and how you can best achieve them. As we’ve learned, homebuyers refinance for different reasons – so look for products that give you the home loan features for the costs you need.
Why choose Savvy?
We are accredited with most reputable lenders in Australia giving you a fair choice to compare
We understand your needs
Renovations and investments
Get the Savvy difference
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Features, features, features
Competitive refinance rates
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Your helpful guides to home loan refinancing
Want to know more about home loan refinancing? Need some help? Read our helpful guides to refinancing
How much can I save by refinancing?
A lot of Australian families are curious about refinancing their home loan. A fair proportion of those people often wonder – how much is this going to actually save me? Surely, we are only talking about a few dollars here and there. That couldn’t be further from the truth! According to the Australian Bureau of Statistics, the national average of savings as the result of refinancing is $259 per month. That’s $3,108 per year. On average, a homeowner will pay off a mortgage over 30 years. This represents an overall saving of $93,240 over the lifetime of that loan! By looking at more loans from more lenders, you could achieve even better savings than the average.
What you need to know about exit fees
The Federal Government banned banks and lenders from levying excessive exit fees in 2011. It also banned them from renaming exit fees as something else such as “account termination fees” or something similar. Though the days of four – even five! – figure exit fees are behind us, you should be aware of other fees that banks or lenders may charge when you refinance. Most lenders will charge a termination fee of some kind, although this will be modest. Some banks charge establishment fees, which can add to the cost of refinancing. To make sure your new home loan has the lowest fees possible, talk to a broker or consultant to find out more.
Refinancing – a path to property investment?
When thinking about refinancing your home loan, you may be considering buying another property at the same time. If your loan to value ratio (sometimes referred to as equity) in your home is reasonable, a bank or lender may extend your mortgage to cover an investment property. (Or they may ask you to pay for Lender’s Mortgage Insurance if your LVR is below 20%.) When you are looking at investment property loans, you should shop around for “investor friendly” mortgages, which include offset accounts or lines of credit for added flexibility. You should also consult a financial professional to help you with tax liabilities.
When is the best time to refinance?
There is no 100% “best” time to refinance, but there are some simple rules to follow to help get the most out of your refinancing. First off, you should not refinance too often, especially if you have low equity in your home. This means buying Lender’s Mortgage Insurance if your loan to value ratio is too low. You should wait at least 18 months before considering a refinance. Other good times to refinance are after rate changes, or every new financial year. This may not result in a full refinancing. It might be enough to prod your current lender into matching or bettering a competing deal.
