What are the benefits of refinancing?

Thinking about refinancing your home loan and want to know the benefits? Here's six potential reasons on how it could help you.

Thinking about refinancing your home loan and want to know the benefits? Refinancing your home loan may help you save money, pay off your existing loan sooner or tap into equity.

1. Securing a lower interest rate

One of the reasons homeowners may choose to refinance is to secure a lower interest rate. Paying a lower interest rate means that your fortnightly or monthly home loan repayments will decrease, helping you save.

2. Reducing bank fees

Another reason for home loans refinancing is to save on those pesky account fees. Although it might not seem like much, these fees can add up over the life of the loan.

3. Consolidating debt

If you have a bunch of different loans that are charging a higher interest rate than your home loan, it could be worth refinancing and rolling your debt into a single home loan. That way you can benefit from the single, lower interest rate through debt consolidation.

4. Tapping into equity

As you make monthly repayments and slowly chip away at the principal of your home loan, the equity in your property will increase. Refinancing gives you access to the equity that you've built up so you can put the money towards expenses like renovations, a holiday or a down payment towards a new home or investment property.

5. Accessing new features

In some cases, refinancing to a different lender might give you access to a whole bunch of different loan features. From offset accounts to redraw facilities or just the opportunity to make additional mortgage repayments without being penalised. These kinds of features can help you save on interest rates and potentially pay off your mortgage quicker when put to good use.

6. Reducing your loan term

Lastly, refinancing could allow you to switch to a different home loan with a shorter term without impacting your repayments too much.

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.‍

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.

^ 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. This discount is applied to each loan that you have with Unloan. If you have multiple loans (e.g. one investor and one live-in loan), they will each have a discount calculated based on when you settled each loan. Unloan may withdraw this discount at any time.

There are no fees from Unloan. However, there are some mandatory Government costs depending on your state when switching your home loan. For convenience, Unloan adds this amount to the loan balance on settlement.

* Other third-party fees may apply. Government charges may apply. Your other lender may charge an exit fee when refinancing.

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What costs are associated with refinancing your home loan?
What is cash out refinancing and how does it work?
4 factors to consider before refinancing

Calculations are not a loan approval. Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions will be set out in our loan offer, if an offer is made.

^Rates shown are inclusive of a 0.01% p.a. discount off our reference rate. On each anniversary of your loan’s settlement date, you will receive an additional discount of 0.01% per annum, up to a maximum discount of 0.30% per annum. For purchase loans with a Loan to Value Ratio (LVR) between 80.01% - 90% LVR, a lenders mortgage insurance (LMI) premium and higher interest rate apply. In some cases depending on the property’s location or type, LMI may also be required for LVR between 70.01% and 80%.

*Comparison rate is calculated on a $150,000 secured loan over a 25 year term. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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