Refinancing your home loan when starting a family

Rates and Fees verified correct on February 22nd, 2017

If you’re a soon-to-be parent, now is an ideal time to review your home loan and shop around for a better deal.

Refinancing your home loan when starting a familyAs you prepare for parenthood, you need to evaluate your lifestyle and start thinking long term. Now is a good time to assess your home loan to make sure your mortgage is fulfilling your needs, not only for you and your partner but for the little ones to come.

Trading in a high-interest home loan for a lower rate can lead to significant savings in the form of lower repayments and useful features that will better cater to your planned lifestyle. Refinancing is not only an opportunity to reap cost savings, it also offers a way to build equity and take advantage of more flexible terms and features.

Make sure you speak with a trusted mortgage broker and financial planner before making the change.

What you need to consider before refinancing

  • Lifestyle change. Before you refinance, decide whether your current property will satisfy your future lifestyle needs. Do you need to renovate and extend the property for an additional bedroom? Or will you need to move into a larger property down the track?
  • Budgeting. When you sit down to work out your budget, you’ll need to factor in the additional cost of having kids. Have you considered the cost of childcare and additional living expenses? Will you be able to afford your child’s education? How much time can you afford to take off work? Do you have a contingency buffer for unexpected medical costs? Make sure that you plan and budget according to your future needs. This is particularly important if you decide to take time out of the workforce following the arrival of your baby and your household income decreases as a result.
  • Finance options. If you’re thinking of having kids in the near future, you may want to scout for a home loan with lower rates or fees or a mortgage that allows you to access equity. A fixed rate mortgage may also be suitable if you want the certainty and security of knowing what your repayments will be month to month.

How soon-to-be parents can go about refinancing

Refinancing your home loan when starting a new family - 2

  • Review your needs. As you plan for your parenting years, you need to evaluate your lifestyle and budget and how this will impact your borrowing needs. Do you have enough room in your home to start a family? What degree of risk are you comfortable exercising with your finances? How can you protect your assets to ensure a financially stable future?
  • Check finances. Now is the time to speak with a financial planner about how you can build wealth for your family. It’s a good idea to lessen the burden of debt before the arrival of your child as this can give you a headstart. Refinancing can be an effective option for many soon-to-be parents, but you should also review your financial and investment strategies to consider alternative ways to build wealth such as a high-interest savings account, superannuation or property investing.
  • Speak up. Speak to your current lender to negotiate a lower rate. With a competitive home loan market, many banks are willing to negotiate a better interest rate in order to retain your business. However, if you find that the features or terms of your existing mortgage no longer fulfill your needs, then it may be time to move on.
  • Crunch the numbers. Estimate the cost of refinancing with a new lender. Keep in mind that you’ll need to pay a discharge fee (around $150-$350) to exit your current loan as well as upfront fees such as an application fee with your new lender. Use our switching cost calculator to get an estimate of your total refinancing cost. Remember to consult your accountant or financial planner to help you with the numbers.
  • Compare home loans. Speak with a mortgage broker to discuss the type of loan that will best complement your borrowing needs. Maybe you need a home loan with an offset account to help you reduce the amount of interest payable over the life of the loan, or maybe your priority is with a home loan that offers a portability feature if you decide to move to a larger property.

Compare competitive home loans today

Rates last updated February 21st, 2017.

ME Flexible Home Loan Fixed - 3 Year Fixed Rate (Owner Occupier)

Comparative rate increases by 0.07%

January 4th, 2017

NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier)

Interest rate increases by 0.23%

January 16th, 2017

CUA Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier)

Comparative rate increases by 0.03% | Interest rate increases by 0.15%

January 19th, 2017

View latest updates

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Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.
3.75% 3.77% $0 $0 p.a. 90% Go to site More info
loans.com.au Essentials - Variable (Owner Occupier, P&I)
A low-interest rate loan suited for purchases and refinances with no application or ongoing fees.
3.59% 3.61% $0 $0 p.a. 80% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier)
A fixed rate package loan with flexible repayments options. $1,500 cashback offer available, terms and conditions apply.
3.98% 4.92% $0 $395 p.a. 95% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.59% 4.42% $0 $375 p.a. 85% Go to site More info
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier)
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.74% 4.12% $0 $395 p.a. 95% Go to site More info
State Custodians Standard Variable Spring Special - LVR 80% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.59% 3.92% $0 $299 p.a. 80% Go to site More info
Beyond Bank Low Rate Special Home Loan
A special low variable rate for Owner Occupier with 100% offset account and no application or ongoing fees.
3.73% 3.73% $0 $0 p.a. 70% Go to site More info
Switzer Home Loan
No upfront or ongoing fees and a competitive variable rate for owner occupiers.
3.89% 3.89% $0 $0 p.a. 90% Go to site More info
loans.com.au Offset Variable - Up to 80% LVR (Owner Occupier P&I)
Take advantage a 100% offset account along with no annual or application fee.
3.67% 3.69% $0 $0 p.a. 80% Go to site More info
CUA Fresh Start Basic Variable Home Loan - Owner Occupier
A basic mortgage with flexible repayments options.
3.89% 3.94% $600 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier Special Rate)
A limited time 2 year fixed rate for owner occupiers. Conditions apply.
3.89% 4.79% $0 $0 p.a. 95% Go to site More info
State Custodians Breathe Easy Spring Special  - LVR 80% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.72% 3.75% $0 $0 p.a. 80% Go to site More info
Bank Australia Basic Home Loan - Variable (Owner Occupier)
A competitive variable that allows borrowers to borrow a minimum of $100,000 with a $0 ongoing fee.
3.79% 3.83% $0 $0 p.a. 80% Go to site More info
ING  DIRECT Orange Advantage Loan - $150,000+ (LVR <= 80% Owner Occupier)
Pay no annual fee for the first year with this packaged variable rate home loan with offset.
3.89% 4.11% $0 $199 p.a. 80% Go to site More info
3.85% 4.26% $0 $395 p.a. 80% Go to site More info
Auswide Bank Home Loan Plus with Freedom Package - Special Package Discount LVR <= 90% (Owner Occupier) P&I
A high maximum LVR home loan with redraw facility and additional payments.
3.79% 4.18% $0 $395 p.a. 90% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
A competitive budget rate without any unwanted bells and whistles.
3.87% 3.92% $445 $0 p.a. 90% Go to site More info
CUA Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier)
A fixed home loan with no ongoing fees and flexible repayments options.
3.84% 4.59% $600 $0 p.a. 95% Go to site More info
Online Home Loans Standard Variable - Owner occupier
A variable rate home loan for owner occupiers with a 100% offset account.
3.74% 3.75% $275 $0 p.a. 80% Go to site More info
Australian Unity Kick Starter Home Loan
$0 ongoing service fees, maximum 80% LVR and a linked transaction account.
3.79% 3.82% $600 $0 p.a. 80% Go to site More info
3.94% 4.33% $0 $395 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Year Fixed (Owner Occupier Special Rate)
A limited time fixed rate home loan with extra repayment abilities. Conditions apply.
3.99% 4.73% $0 $0 p.a. 95% Go to site More info
Bank Australia Premium Home Loan Package - 2 Year Fixed (Owner Occupier) LVR < 80%
A discounted 2 year fixed rate loan with high maximum LVR and no application fee.
3.69% 4.31% $0 $350 p.a. 95% Go to site More info
ME Flexible Home Loan Fixed - 3 Year Fixed Rate (Owner Occupier)
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
4.09% 4.80% $0 $0 p.a. 95% Go to site More info
Heritage Bank Discount Variable Home Loan - Special Rate Offer (Owner Occupier) New Customers Only
A great interest rate home loan offer with unlimited redraw and unlimited extra payments.
3.79% 3.84% $600 $0 p.a. 95% Go to site More info
State Custodians Standard Variable Spring Special - LVR 90% (Owner Occupier)
A special rate for owner occupiers with free 100% offset account and no application fee.
3.69% 4.02% $0 $299 p.a. 90% Go to site More info
Bank Australia Premium Home Loan Package - LVR<=80% $700k + (Owner Occupier)
Enjoy the discounted interest rate with redraw facility and no ongoing fees.
3.82% 4.17% $595 $350 p.a. 95% Go to site More info
Greater Bank Great Rate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A competitive rate with redraw facility. NSW, QLD and ACT residents only.
3.89% 3.89% $0 $0 p.a. 85% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Years Fixed (Owner Occupier)
Enjoy a low interest rate and borrow up to 95% (with LMI) of your home value.
4.49% 4.90% $0 $0 p.a. 95% Go to site More info
loans.com.au Essentials - Smart Loan Package P&I
This competitive rate is only available if you package your investment loan with your owner occupier loan.
3.59% 3.61% $0 $0 p.a. 80% Go to site More info
AMP Essential Home Loan  -  $40,000 to $99,999 (Owner Occupier, P&I)
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
4.55% 4.57% $350 $0 p.a. 90% Go to site More info
Australian Unity Health, Wealth and Happiness Package - (Owner Occupier)
Get a 0.60% discount on your rate, a 100% offset account and no ongoing fees.
4.05% 4.08% $600 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 1 Year Fixed (Owner Occupier)
Get a short term fixed rate for that investment property with no application or ongoing fees.
4.49% 4.95% $0 $0 p.a. 95% Go to site More info
IMB Essential Home Loan - LVR <=90% (Owner Occupier)
100% offset account, unrestricted additional repayments and no monthly account keeping fees
4.09% 4.09% $0 $0 p.a. 90% Go to site More info
NAB Base Variable Rate Home Loan - Owner Occupier (P&I)
A competitive no frills home loan with no application fees for a limited time. $1,500 cashback offer available, terms and conditions apply.
4.10% 4.14% $600 $0 p.a. 95% Go to site More info
ANZ Simplicity PLUS Basic Home Loan - Special Offer (Owner Occupier)
Enjoy a home loan with no aplication fee or ongoing fee.
4.03% 4.07% $0 $0 p.a. 95% Enquire now
3.88% 3.89% $600 $0 p.a. 90% Enquire now
Commonwealth Bank Wealth Package Fixed Home Loan - 2 Year Fixed (Owner Occupier) P&I
A package home loan with fee free extra repayments available during the fixed term.
3.99% 5.00% $0 $395 p.a. 95% Enquire now
St.George Fixed Rate Advantage Package -  2 Year Fixed Rate (Owner Occupier, P&I)
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cash back available for refinancers, conditions apply.
3.99% 5.04% $0 $395 p.a. 95% Enquire now
Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years
A low interest rate home loan and competitive two year fixed rate.
4.19% 5.32% $0 $395 p.a. 95% Enquire now
St.George Basic Home Loan - Promotional Rate (Owner Occupier, P&I)
A no frills loan with a competitive rate and a maximum LVR of 95%.
4.08% 4.09% $0 $0 p.a. 95% Enquire now
Westpac Flexi First Option Home Loan - 3 Years Introductory Special Offer (New Owner Occupier, P&I)
A limited time deal for new owner occupiers. Advertised rate includes 1.03%p.a. discount for the first two years.
3.99% 4.37% $0 $0 p.a. 95% Enquire now

Planning for parenthood is an exhilarating time, which is why it pays to reconsider your home loan and opt for a more competitive product so you can secure your family’s future.

Images: Shutterstock

Belinda Punshon

Belinda is a journalist here at finder.com.au. Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

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HSBC Home Value Loan - Resident Owner Occupier only

Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.

loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.59%p.a.
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Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)

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