Reduce Monthly Payments
Lower interest rates result in reduced monthly mortgage payments, freeing up funds for other essential expenses or savings.
Lower interest rates result in reduced monthly mortgage payments, freeing up funds for other essential expenses or savings.
Lower interest rates can significantly reduce the amount of interest paid over the life of the loan, allowing you to save money in the long run.
With more manageable monthly payments, you can improve your overall financial stability and reduce financial stress.
Lower interest rates accelerate the rate at which you build equity in your home, providing you with greater financial security and potential future opportunities.
When refinancing your home, there are several important factors to consider and be cautious about. Here are some things to look out for:
Interest Rates: Compare the interest rates offered by different lenders to ensure you are getting a better deal than your current loan. Keep in mind that interest rates can vary depending on factors such as loan term, loan-to-value ratio (LVR), and your creditworthiness. Look out for any promotional or introductory rates that may increase after a certain period.
Fees and Charges: Take note of the fees associated with refinancing, such as application fees, valuation fees, discharge fees, and legal fees. Ensure that the potential savings from refinancing outweigh the fees involved. It’s important to consider both upfront fees and any ongoing fees associated with the new loan.
Loan Features: Evaluate the features and flexibility offered by the new loan. Consider factors such as the ability to make additional repayments, redraw facilities, offset accounts, and the option to switch between variable and fixed interest rates. Assess whether these features align with your financial goals and requirements.
Loan Term: Determine if you want to change the loan term when refinancing. While extending the loan term can reduce monthly repayments, it may result in paying more interest over the life of the loan. On the other hand, shortening the loan term may increase monthly repayments but help you pay off the loan sooner.
Loan-to-Value Ratio (LVR): Be aware of the LVR requirements of the new loan. If your property’s value has decreased or your equity has changed since you took out the original loan, it could affect your ability to refinance or result in additional costs such as lenders mortgage insurance (LMI) if the LVR is too high.
Prepayment Penalties or Break Costs: Check if there are any penalties or break costs associated with paying off your existing loan early. Some loans may have exit fees or break costs, particularly if you have a fixed-rate loan. Consider these costs in your refinancing calculations to ensure it’s financially beneficial to proceed.
Creditworthiness and Eligibility: Understand that refinancing requires a reassessment of your creditworthiness. Lenders will review your financial situation, income, expenses, credit history, and employment status. Ensure that you meet the eligibility criteria for the new loan before proceeding with the application.
Consider Professional Advice: It can be beneficial to consult with mortgage brokers or financial advisors who can provide guidance specific to your situation. They can help you navigate the refinancing process, assess the potential benefits, and ensure you make an informed decision.
Carefully evaluating these factors and understanding the terms and conditions of the new loan will help you make an informed decision when refinancing your home. Take the time to compare offers, calculate the potential savings, and consider your long-term financial goals before proceeding.
Lenders may charge an application fee when you apply to refinance your home loan. This fee covers the administrative costs of processing your application. It’s important to inquire about the application fee amount before proceeding with the refinancing process.
When refinancing, there may be a settlement fee payable to cover the costs associated with the transfer of the mortgage from your current lender to the new lender. This fee covers administrative and legal expenses involved in the settlement process.
If you’re refinancing from one lender to another, your existing lender may charge a discharge fee. This fee covers the administrative costs of releasing the mortgage and closing your loan account with them.
It’s important to consider any ongoing fees associated with the new loan, such as annual fees or account management fees. These fees can vary between lenders, so it’s important to compare the ongoing costs when evaluating different loan options.
Your Madd Broker will consult with your new lender and review the loan documentation to understand the specific fees applicable to your refinancing. Additionally, they will consider the potential benefits of refinancing, such as securing a lower interest rate, accessing different loan features, or consolidating debt, to determine if the potential savings outweigh the associated fees.
Whether we like it or not, banks aren’t generally in the habit of checking in with their customers and offering a discounted interest rate, which is why consumers need to be proactive when the market conditions change. While the mortgage you originally signed up for may have been a great fit at the time, there’s a wide variety of circumstances to consider when evaluating if it’s still the best loan product for you or not.
Refinancing refers to the process of paying out your current home loan by taking out a new loan. While this can be with the same lender, it is also common to change to an entirely different lending provider for a better interest rate, lower fees or generally more favourable loan terms overall.
Navigating the complex world of home loans has long been regarded as stressful, frustrating and time consuming – but the good news is that it doesn’t have to be.
Since their inception in 2012, the team at Madd Loans have worked tirelessly in providing over 3,000 Australians with finance options to help turn their dreams into reality. With the entire brand being built on referrals, owner George Samios takes great pride in making the loan process both fun, educational and stress free – and he has a swag of awards to prove it.
If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing mortgage solutions or a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.
Lower Interest Rate: One of the primary reasons to refinance is to secure a lower interest rate. If market conditions have changed since you obtained your original loan or if your credit score has improved, refinancing can help you take advantage of lower interest rates, potentially saving you money over the life of the loan.
Reduce Monthly Payments: Refinancing can also be a way to lower your monthly mortgage payments. By refinancing to a loan with a longer term or a lower interest rate, you can spread out your repayments over a longer period or reduce the interest portion of your monthly payment, thereby freeing up some cash flow.
Access Equity: If your home has appreciated in value or you have made significant repayments on your current loan, you may have built up equity. Refinancing allows you to access this equity by increasing your loan amount, which can be used for various purposes such as home improvements, investments, or debt consolidation.
Consolidate Debt: Refinancing provides an opportunity to consolidate high-interest debt, such as credit cards or personal loans, into your mortgage. By combining these debts, you can potentially benefit from a lower overall interest rate and a single monthly payment, simplifying your finances.
Change Loan Terms: Refinancing enables you to modify the terms of your loan. You can switch from a variable rate to a fixed rate or vice versa, depending on your preference and the current market conditions. Additionally, you can adjust the loan term, such as refinancing from a 30-year loan to a 15-year loan to pay off your mortgage sooner.
Change Lenders: If you are dissatisfied with your current lender’s customer service or want to explore better options, refinancing allows you to switch to a different lender. This can give you access to improved customer service, more competitive interest rates, or additional loan features that better suit your needs.
Renegotiate Loan Features: Refinancing provides an opportunity to renegotiate the features of your loan. You can add features like an offset account, redraw facility, or flexible repayment options that may not have been available with your original loan.
Life Changes: Refinancing may be prompted by major life events such as marriage, divorce, starting a family, or a career change. These events can impact your financial situation and goals, making it necessary to adjust your mortgage arrangements accordingly.
Before deciding to refinance, it’s important to carefully consider the associated costs, such as application fees, legal fees, and valuation fees, to ensure that the potential benefits outweigh the expenses. It’s also advisable to seek professional advice from mortgage brokers or financial advisors to assess the suitability of refinancing based on your individual circumstances and financial goals.
When it comes to virtually any style of loan, nobody wants to pay any more money than they have to right? Offset accounts are one way to significantly reduce the amount of interest that you are paying to a bank.
When making repayments on your home loan, you’re usually paying both the principal of the actual loan, plus interest. Offset amounts can make the loan technically “smaller”, offering borrowers a chance to pay their loan off faster.
Australians pay tax on any interest earned from a savings account or term deposit. If you have a large amount of savings, transferring this to an offset account is one way to reduce the amount of tax you’re paying.
If you’re making voluntary contributions to your home loan without the function of an offset account or redraw facility, then you can’t access those funds or get them back in the event of an emergency – so an offset account provides an extra layer of both security and flexibility.
If you’re feeling anxious about how future interest rate rises will potentially affect you or how you could best use an offset account, it’s a good idea to make an appointment with your lending provider or mortgage broker. In simple terms, a home loan health check is a free discussion or “check up” aimed at fine tuning all the complexities involved with your current mortgage, and can allow consumers to explore their options linked to offset accounts.
Home loan navigation can be challenging, particularly when you’re unsure about the right choice for your needs. Fortunately, teaming up with a mortgage expert ensures that you have a knowledgeable ally to guide you through the process.
If contemplating your financial future resonates with you, now may be the perfect time to consult with a professional. Whether you’re seeking mortgage solutions or in need of a financial fairy godmother, the cohesive team at Madd works collaboratively to transform your aspirations into actual achievements.
Home loan navigation can be challenging, particularly when you’re unsure about the right choice for your needs. Fortunately, teaming up with a mortgage expert ensures that you have a knowledgeable ally to guide you through the process.
If contemplating your financial future resonates with you, now may be the perfect time to consult with a professional. Whether you’re seeking mortgage solutions or in need of a financial fairy godmother, the cohesive team at Madd works collaboratively to transform your aspirations into actual achievements.