4 factors to consider before refinancing

Thinking about refinancing your home loan? Before you pull the trigger, there are a few key points you may want to consider.

Check the comparison rate

The interest rate might look great, but how does the comparison rate stack up against your current home loan interest rate? The comparison rate includes the interest rate as well as the fees and charges associated with the loan. Ultimately, it helps you to get an idea of the actual cost of the loan, so it usually pays to compare the comparison refinancing rates rather than the interest rate alone.  

Discharge fees

In some cases, you might have to pay up to exit your home loan. If you’re currently on a fixed-rate home loan you might get charged a break fee if the fixed rate period isn’t up yet. It’s well worth checking how much you could be up for before making the switch, but that’s not to say it’s not worth moving to a different lender if there are still savings to be had.  

Features with your new lender

If you’re used to having access to certain features as part of your existing home loan it’s worth checking that you’ll be offered a similar setup with the new loan.  

Check your LVR

If your LVR is more than 80% you might have to pay lenders mortgage insurance (LMI) again with your new lender. This can be a significant cost, especially if you’ve already had to foot the bill for it, so be sure to take this into account when deciding whether to switch.

Ready to refinance? Here’s our six step guide to refinancing and how it works.

This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

Unloan is a division of Commonwealth Bank of Australia.

Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).

Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.

*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.