9 questions to ask your lender when refinancing your home loan

When considering to refinance your home loan, it’s important to know what questions to ask your lender, to make sure you’re switching to a new home loan that suits your needs.

Time to refinance your home? For most people, the refinancing process can be just as confusing as buying a home and finding the right home loan. It’s important to know what questions to ask your lender, to make sure you’re switching to a new loan that suits your needs.

1. How will refinancing benefit me?

Refinancing to a new loan can help put you in a better position. Some benefits include:

  • Securing a lower interest rate to save money on repayments
  • Reducing bank fees
  • Accessing new features and facilities  

2. How much will refinancing cost?

While using a mortgage calculator can help you to compare your options in terms of potential repayments and savings, don’t forget to consider any upfront costs. From setting up your new loan to discharging your existing home loan, it’s important to make sure you include the cost of refinancing into your calculations. Learn more about upfront costs associated with refinancing your home loan here and Unloan’s no fee promise here.

3. What loan features will be available to me?

While securing a lower interest rate is important, refinancing your home loan could help you access new features and facilities that suit your needs better – for example: offset accounts, redraw facilities and more.

‍Please note we do not offer offset accounts at Unloan.

For example, a redraw facility usually allows you to make additional repayments, which could help you to pay off your loan quicker. Alternatively, an offset account can help to reduce the amount of interest you pay on your home loan if you have savings you’d like to offset against your mortgage. Keen to learn more about the difference between an offset account and a redraw facility? Get the low down on how these two features work here.

4. How should I set up my rate type?

One of the main factors to consider when choosing a new home loan is the type of interest rate. From fixed-rate loans to variable loans and even split-rate mortgages, your new lender should be able to show you the pros and cons of these different options and how they could impact your circumstances. Chances are your refinanced rate will be different from your initial interest rate, so it’s important to make it work for you.

5. Can I access my home equity?

If you’re keen to tap into your home equity when you refinance, it’s important to ask the question and make sure your new loan will provide the access you need. You can use this equity to:

  • Fund renovations
  • Buy an investment property
  • Take a well-deserved holiday

If you have intentions to use your equity, it’s important to make sure you’ve built up enough equity and your new home loan aligns with your plans. If you have less than 20% equity in your property, you could be up for lender’s mortgage insurance (LMI) again.  

6. Can I consolidate other debt?

The interest rates charged on home loans are often lower than other types of debt including personal loans and credit cards. If you’re currently paying off several different pieces of debt, why not see if you can roll them all into a single loan with a lower interest rate?

7. How long is the new loan term?

In some cases, you might be able to switch to a longer or shorter loan term, but it’s important to consider how the switch could affect you over the long term.  

Switching to a longer loan term?

A longer loan term might help you reduce your fortnightly or monthly repayments but you could end up paying more over the life of the loan.  

Switching to a shorter loan term?

A shorter term could mean you’re up for higher repayments, but you might end up saving on the total interest payable over the life of your loan.  

8. How long will the refinancing process take?

Refinancing to a new loan doesn’t happen overnight, so it can help to get a rough idea of how long your lender expects the process to take. Especially if you’re going to be rolling off a fixed-rate term and onto a standard variable rate. Depending on the lender, the length of the refinancing process differs and knowing the potential timeframe can help plan accordingly. Learn more about how long the Unloan refinancing process takes here.

9. What documents do you need?

Different lenders have different lending criteria, so it can be worth checking in with them to see what information and documents they need to process your application. Typically, you’ll need to provide:

Having the right documents on hand can help to make the refinancing process smoother. Whether you’re keen to learn more about the benefits of refinancing or how the refinancing process works, Unloan is here to help. Chat with one of our home loan experts today.

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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.

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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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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