Guide to Refinancing

Borrowers switch to a different mortgage provider for a variety of reasons, whether to reduce payments each month, release equity to provide income, renovate or extend their homes or finance an investment property.

Refinancing, in the majority of cases, takes only a couple of weeks at most. Often lenders will even pick up the bill and may even waive some arrangement costs or valuation fees, meaning there are no large legal bills for you to worry about. Refinancing gives you the opportunity to combine your debts, allowing you the freedom of only one single repayment each month.

It is simply a case of working out which of our many available options is best suited to your needs. You may be interested in a fixed rate loan, locking in a low interest rate for the term of the loan; or perhaps a variable rate loan would be better suited. It is also possible to combine these products, where you can opt for a fixed interest rate for a specified time period, which then switches to a variable rate loan. An offset mortgage is also a viable option. This sets any savings you have against your mortgage, bringing down the amount of interest you are required to pay. At Mortgage Brokers .net.au we offer a wide range of refinancing products, giving you the opportunity of making your mortgage work for you.

Step by step to a new lender

1. Write down your monthly repayments and check your mortgage rate.
   
2. Will you have any early repayment charges on your loan? These can work out to thousands of dollars, so it is best to work out if they apply or not.
   
3. Compare deals by using the internet or phoning around, alternatively, you can let us take the hassle out of searching for the best deal. We will be able to save you time and money by doing all the running around for you.
   
4. If you are borrowing additional funds when refinancing, check you if you will have to pay a mortgage insurance premium – a payment that protects the lender, but not you, if you default on the payments on your loan.
   
5. Consider other costs such as loan arrangement fees and broker fees.
   
6. Consider paying the arrangement fee on completion, rather than adding it to the loan. This will mean you avoid paying interest on the fee amount for the duration of the loan. Booking fees, usually on fixed-rate deals, may also be an additional cost. These are paid up front, and are lost if you back out of the deal.
   
7. Valuations usually cost $300 - $500. They are usually less if you are refinancing with the same mortgage lender. Legal fees vary, but are generally around the $1,000 - $2,000 mark.
   
8. Another option is the type of deal where the lender covers the cost of both legal and valuation fees. Although the interest rates may be higher, this type of deal can be great value for small to medium loans.
   
9. Watch out for any extra fees you may incur. These can include charges for the transfer of funds or a fee for when the mortgage account is closed and the deeds of the property are released.