What are the benefits of refinancing?

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. Please note we currently do not offer offset accounts at Unloan, but a linked-CommBank offset account is coming soon.

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.‍