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Refinancing Home Loan Offer
loans.com.au Essentials - Variable (Owner Occupier, P&I)
variable rate
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Refinancing Home Loan Offer
With the loans.com.au Essentials Variable Home Loan enjoy a home loan with no application or ongoing fees as well as a competitive interest rate. Borrow up to 80% of the property's value. For owner occupiers and principal and interest repayments only.
- Interest rate of 3.64% p.a.
- Comparison rate of 3.66% p.a.
- Application fee of $0
- Maximum LVR: 80%
- Minimum borrowing: $50,000
- Max borrowing: $2,000,000
Compare refinance home loans today
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What is refinancing?
Refinancing is the act of switching home loans. This can be by moving your loan to a new lender, or just by changing the type of home loan you have with your existing lender.
Usually, refinancing is done to get a lower rate or a loan suitable for pursuits such as renovations.
More often it's done by switching to a new lender that may offer an interest rate or features that better suit your situation.
Why should I consider refinancing my home loan?
While most people refinance to get a better rate, there are a whole range of reasons you might want to say goodbye to your existing lender and look for a new one.
Let's have a look at the various reasons below:
1. For a better interest rate
It's always a good idea to approach your existing lender first to ask for a better interest rate. Make sure you do your research beforehand and show them the existing deals in the market and ask if they can match it. Staying with your existing lender could mean that you save on discharge or exit fees plus application fees of your new loan, not to mention the amount of paperwork you've saved. If your lender is unwilling to help, then it might time to move on.
2. To access and use equity
If you've built a significant amount of equity in your home that you'd like to access, you could opt for an line of credit home loan. You can use this equity to purchase other properties or assets, such as funding a renovation for your home or purchasing a new car. One of the advantages to this is that you can purchase an item with the same interest rate as your home loan, rather than the higher interest rates charged on personal loans or credit cards. However, one of the risks of accessing this equity is that it might take a bit longer to pay off your mortgage.
3. To get new features
Again, it's a great idea to approach your lender first if you want more features. Features like additional repayments, a redraw facility, portability and offset accounts can help you save on interest repayments. If your existing home loan doesn't have these features and you want more flexibility in your home loan, it might be time to switch.
4. To pay less in fees
Fees should always feature in a home loan comparison. Compare the application or establishment fees, ongoing fees, valuation fees, monthly or annual fees, and any other fees for using features such as redraw facilities or 100% offset accounts. Just because a home loan has an annual fee or application fee it doesn’t mean it should be avoided. Take the time to look at it in depth and find out whether the fees are worth it for the benefits.
5. To get a loan that better suits your life
Different home loans suit different life stages, look below to see what kind of loans or characteristics may suit you.
First home buyers
- Low rate and low fees
- Ability to make extra repayments
- Introductory rate or basic home loans may suit these borrowers
Young professional or family
- Portability
- Redraw facility
- Standard variable or fixed rate loans may suit these borrowers
Middle aged professional
- Redraw and offset facilities, packages with linked products
- Convenient and flexible product
- Package home loan or line of credit loan may suit these borrowers
Preparing for retirement
- Low rates and fees
- Ability to access home equity
- Line of credit home loan or basic home loan may suit these borrowers
55 and over/retired
- Redraw facilities and option to access equity
- Line of credit home loans or reverse mortgages may suit these borrowers
6. To take advantage of a cashback offer
Many home loans will offer refinancing cash incentives or sign-up bonuses all year round. These offers are especially prevalent during the spring "mortgage season". Cashback incentives are usually around the $1,000 mark, but can be as high as $2,000. These offers can be a great way to minimise the costs of refinancing, but be sure that the loan you’re applying for still has a competitive rate, fees and features so that once the cash is gone you’re not left with an uncompetitive loan.
Compare home loans with cashback incentives
- 7. To consolidate debts
Juggling a few debts can be hard. This is where a debt consolidation loan could help. It can roll all your existing debts into a single manageable loan. If done correctly, you can save on fees and reduce the amount of interest payable by combining your debt into a single repayment with a competitive rate.It's important to work closely with your lender during this period to ensure that you actually save money in the process. There's the risk of increasing the loan terms on some of your short term debts (such as a credit card) and you may end up paying more.
Can I refinance my home loan and consolidate my credit card debt?
It's definitely possible to refinance and consolidate your debit card debit. Your lender will assess your current income and entire loan amount. You'll also need to take into account lenders mortgage insurance and refinancing costs. Be sure that the amount you'd like to refinance is less than 80% LVR.
Read our guide to debt consolidation home loans
8. To get better customer service
Not all banks are equal, and this is the most difficult consideration to measure. Make sure that you ask the following questions and that the lender meets up to your expectations:
- How much guidance and support are you going to provide?
- Does the support align with my needs?
- Is it you that I'll speaking to the whole time?
Having one person dedicated to your home loan application and needs is a lot easier and more convenient than speaking to multiple departments. What sort of guidance will you be providing through this process? The amount of support they're willing to offer generally reflects the standard of their customer service.
What are the advantages and disadvantages of refinancing?
- You could get a lower rate
- You could save on fees
- Your loan might suit you better in terms of interest rate type and features
- Your new lender might offer better service
- You'll have to pay a discharge fee to get out of your old loan
- You'll usually have to pay upfront fees for your new loan
- You might have to pay expensive break fees for your old loan when you leave if it's a fixed rate
How much will it cost to refinance?
You can divide refinancing costs into two types: exit costs for your old loan and upfront fees for your new loan.
Exit costs of old loan
| Fee | Costs | Details |
|---|---|---|
| Discharge fees | $200 - $400 |
|
| Exit fees | Costs vary |
|
Upfront costs of new loan
| Fee | Costs | Details |
|---|---|---|
| Application/establishment fees | $200 - $600 |
|
| Valuation fees | $100 - $300 |
|
| Settlement fees | $100 - $300 |
|
| Legal fees | $75 - $150 |
|
| Stamp duty | Varies |
|
| Lenders mortgage insurance (LMI) | Varies |
|
| Ongoing costs | Varies |
|
Want to compare the expenses of two loans? Use our loan switching calculator
How does the refinancing process work?
Refinancing involves first speaking to your lender to see if they can give you a discount or offer a better loan. Presuming this doesn't solve things, you'll then compare other loans and apply for one you're interested in.
The diagram below explains the process visually.
When does it make sense to refinance?
Refinancing should be done when you can get a home loan which costs less (either in fees and rates) and still suits your needs, or suits them better than your previous loan.
Other reasons for refinancing include:
- To renovate your home
- To consolidate debts
- To buy a new home
Watch: Former Aussie Home Loans General Manager of Marketing Stuart Tucker sums up when you should consider refinancing:
When does it not make sense to refinance?
- You have a fixed rate home loan with a very high exit cost and the cost of fees could outweigh the benefits of refinancing until the fixed rate period is over
- You think you’ll probably sell your property in the near future and you won't keep the loan long enough to make any decent savings
- Your loan amount is small; in this case the savings you’ll get by refinancing might not be worth the interest you’ll pay
- You've been with a lender for quite some time, enjoy the service you receive and have other products with them (you might be better off asking your lender for a discount)
- Your property value has fallen or your LVR is still over 80%. This could see you pay lenders mortgage insurance again
- You need to refinance to a longer term. This could result in more interest paid
Read our guide to see if it makes sense to refinance
Are there any tax implications when refinancing?
There might be tax implications for you depending on your situation and whether the property is an investment or not. It’s always wise to speak to an accountant first.
The Property Tax Specialists are an award-winning leader in the Australian taxation field, with strengths in accounting, marketing and business. They can help with matters of asset protection, property investing, accounting and taxation, including capital gains tax enquiries. Fill out this form with your query to get into contact with an expert from Property Tax Specialists today.
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Enquire now and you'll be contacted by a life insurance consultant for an obligation free disucssion about life insurance options suitable for you. The consultant will work with you to compare a range of life insurance providers.
What documents do I need to supply?
Generally you’ll need to provide proof of your salary and other income, government payments, home loan statements and a copy of your council rates notice, statements for any liabilities and either your drivers licence or passport. Once your information has been reviewed, your lender can normally give you a response fairly quickly. The verification, valuation and assessments, approval and settlement can take up to a month or more to complete depending on your financial situation.
Hi just wondering what the process is for changing name on the title from sole proprietor to joint proprietors when there is a mortgage on title?
Hi Christine,
Thanks for your inquiry.
If you plan to transfer a share in your property or renegotiate any mortgage, the first step is to contact your lender. Your lender will assess the financial situation of both parties and may or may not give you consent. If approval is given, your lender will most likely lodge all the documents. This can include the Certificate of Title after you have the Transfer Form stamped from the Office of State Revenue (OSR). There is usually a fee involved in this process. For more information please click here.
Hope this information helped.
Cheers,
Arnold
If I have two St George loans with a mate of mine…(both our names on both…he pays one and I pay the other) what is the best way of getting out of having two loans and having only one with my name and one with his name on it?
Phil.
Hi Phil,
Thanks for your question.
It is possible to refinance a joint personal loan to an individual loan and get a better rate through any of the refinancing loans on this page. Please note that you should meet certain eligibility criteria to get approved. Please click the name of the loan product on our page so you’ll see the details how to qualify. The ‘go to site’ button is for submitting your application.
Cheers,
Anndy
How to refinance the exsiting mortgage for low interesr rate
Hi Senita,
Thanks for your question.
If you are looking to refinance your existing mortgage, the step-by-step refinancing process is explained in the above infographic.
Cheers,
Anndy
I have a rented unit in Sydney that I would like to refinance to buy land in NZ where I now live. I have contacted a broker who came back with 75% LVR (thats OK), but with a whopping 7.35% interest.
What other options are open to me?
Hi Richard,
thanks for the question.
You’ve come through to finder.com.au, a comparison service. Unfortunately by law we’re unable to suggest specific home loan rates and fees which you could apply for. It might be a good idea to contact a number of lenders that you’re interested in or alternatively speak to another broker to get another recommendation.
Cheers,
Marc.
Do you know if any of the lenders will re-finance pensioners? Both aged 60, and still have 15 years left on current mortgage
Hi Ros,
thanks for the question.
While I can’t by law suggest specific lenders to try to refinance to, a good mortgage broker will be able to give you a personalised suggestion of which lenders to speak to.
I hope this helps,
Marc.
Hi Ros,
Thanks for reaching out.
It may be difficult to qualify for a refinance if you are pensioners as most lenders will review you as high-risk borrowers. However, your best course of action would be to speak to a licensed mortgage broker to discuss your refinance options. A broker can help you understand your borrowing capacity and they can draw upon a panel of lenders, including specialist or non-bank lenders, that may have more lenient eligibility criteria.
Ultimately, a broker will determine your propensity to repay the refinanced loan by taking into account your income sources, assets, credit history and any existing debts that you have. This type of application will be treated on a case-by-case basis.
We have a page about refinancing after retirement which you might find useful.
All the best,
Belinda
I have A mortgage in New Zealand and I wondered if I could refinance that mortgage in Australia. I live and work in Australia now and it costs money to transfer to and from New Zealand. Or is there a way I could get part of a loan, say 100000 to pay part of that mortgage off and pay it in Australia? Thanks
Hi Terry,
Thanks for reaching out.
Most Australian lenders prefer that the security for the home loan is based in Australia, so it may be difficult for you to refinance the mortgage in this case. However, your best course of action would be to speak to a licensed mortgage broker as they’ll be able to help you understand your refinancing and borrowing options.
To minimise the cost of transferring funds to and from New Zealand, you can compare a range of global money transfer providers to find one with competitive terms.
All the best,
Belinda
Hello,
My apologies up front for the length and amount of questions involved but I’m at the desperate stage. I am on the dsp, my husband is my career and on the carer’s pension and allowance. This is our only income. We would like to borrow $25000 for debt consolidation, home renovations and the purchase of a small second hand car. We owe approximately $155000 on our home loan and have had our home appraised by three separate agents as it is at $35000 – $36000. Our present home loan is with BankWest at 4.29% variable. The bank has given us this year at an interest only rate, but is unwilling to allow us to refinance because we are on pensions. Is there any financial institution that will either assist us in refinancing or give us a personal loan for $25000? We are wanting to do the renovations preparatory to hopefully putting our house on the market by November/December this year? We have already been turned down by Society One and NAB because our income is only from Centrelink pensions. I am at a loss to know where to turn now and would be very grateful for any assistance that could be provided? One other item to consider is that our VEDA credit scores are in the 700′s and 800′s respectively.
Thank you, very much
Shawn
Hi Shawn,
Thanks for your enquiry.
Unfortunately it may be difficult for you to refinance your home loan if you don’t have a secondary source of income to supplement your DSP.
You might be interested to read our page about refinancing while unemployed which provides some useful tips about how you can improve your chance of being approved for a refinance application. You may want to consider requesting a copy of your credit file, clearing your existing debt (e.g. other personal loans or credit cards) and considering niche or non-bank lenders that may have more lenient eligibility criteria.
We also have an article about how to refinance your home loan to consolidate debt and what to do if your application is rejected.
On this page, you can learn more about home loans for Centrelink recipients and enquire with a mortgage broker to discuss your options. Be careful about over-applying for different home loans as this can negatively impact your credit file.
You can compare some personal loans here.
I wish you all the best.
Thanks,
Belinda
hi i have a investment property with a interest only loan but want to move into that property change the the loan as owner/occupy variable to pay the house off quicker i owe $247000 and is value at $310000 also would like to borrow $10000 to do go on a holiday what should i do
Hi Brad,
thanks for the question.
I would recommend contacting your lender and tell them about your plans to see what options they can offer you. Alternatively, you can compare home loans from new lenders and contact them to refinance.
I hope this helps,
Marc.
Can a bridging loan be refinanced if a person has no job?
Hi Moggy,
thanks for the question.
Unfortunately, most lenders will want to see borrowers with a steady income source in order to approve a refinance or any other type of loan.
I hope this helps,
Marc.
We have quite a few investment properties though all mortgaged. We are self employed and have made payments without any problem as rent received is enough to pay expenses. However, recently we tried to increase our loan but came across brick wall after brick wall with the big Banks. Apparently they do not favour anyone over 70 years and 60 years although we have no problems with our payments. This is age discrimination and certainly not caring for existing customers. Are there any lenders out there who will give us a loan?
Hi Choo,
thanks for the question – it can be frustrating to run across these kinds of obstacles when looking for a home loan.
There are lenders which will consider applications from borrowers of your age, although unfortunately the banks keep this kind of criteria fairly under wraps from the average consumer. For this reason I recommend contacting a mortgage broker, who will have more experience dealing with lenders and will know which one will be appropriate for your age and other circumstances.
You can find a mortgage broker by looking at our comparison table. Note that most mortgage brokers are free to you, they earn a commission from the lender you choose to go with.
I hope this helps,
Marc.