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Home Loan Refinances Are Surging As Interest Rates Rise

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Home Loan Refinances are surging as interest rates rise

As we all know, the Reserve Bank of Australia commenced increasing interest rates for the first time in 12 years in May 2022. This was a shock to many who have not experienced rising interest rates.

Many homeowners are now refinancing their home loans to lower their mortgage repayments. Mortgage Broker What If We Finance will give you the low down today on the benefits of refinancing your home loan.

Why are interest rates rising?

As you all know since May 2022, the Reserve Bank has been raising interest rates. The reason is to keep inflation under control. Since May, the cash rate has risen from 0.10% to 2.60% in October 2022.

A rising cash rate means repayments on borrowing get more expensive, and home loan broker What If We Finance has seen repayments on a $700,000 mortgage increase by approx. $14,000 per annum or $1,166 per annum.

On a 30-year home loan, this equates to over $420,000 in interest costs. Obviously, your circumstances may differ, so it pays to talk to us to understand the financial impact.

Increasing interest rates means you must ensure you are on the best possible rate, which is where home loan refinancing becomes important.

Home Loan data shows home loan refinancing is increasing exponentially.

External Refinance

Why Refinance?

Get a Better Interest rate

A better interest rate means lower repayments and more money in your pocket. In low-interest-rate environments, people often neglect their home loans. They fall asleep on their mortgage.

Every 0.25% saves you $1,750 per annum or $32,500 over 30 years, so it makes sense to find a better deal and refinance.

Fix your home loan

Fix your home loan

While fixed rates are no longer at record lows, some people want the predictability of home loan repayments and, as such will loom to fix. Fixing a home loan gives you set repayments for some time and allows you to budget with certainty.

But with fixed rates being much higher than variable rates, caution should be exercised.

Your circumstances have changed.

Refinancing may be an option to consider as your circumstances change (including income, expenses) and overall situation.

Debt Consolidation

Debt Consolidation

If you have multiple debts with higher interest rates, consolidation is an option to consider. Debt consolidation bundles all payments together at a lower rate and saves you money. But you do need to discuss whether this makes sense with your mortgage broker.

Ultimately people refinance their home loans to save money and pay off their home loans sooner. Everybody’s circumstances are different, and this where are home loan health checks, and discussions with your mortgage broker can help.

What If We Finance is Melbourne’s leading independent mortgage broker and can. Help you refinance your home loan 7 days a week. We can scan the market with over 40 lenders and 2,000 home loan products to help you find an unbeatable deal. Feel free to contact us today to find out more.

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