Refinancing home and investment loans

There are many reasons people think about refinancing other than interest rates. You may want to:

• change your broader financial strategy and prioritise cash-flow over paying your loan down sooner, 
• release equity from a property to renovate it or to or purchase another property,
• release equity to invest in something other than property, or
• change your loan type from owner occupier to investment or vice versa.

Even without one of the above reasons, it is good financial practice to review your home or investment loan every few years to make sure it still meets your needs and is helping you obtain your goals.

Some things to keep in mind when considering refinancing:

• the lender will conduct a valuation of your property and they are often on the conservative side,
• lenders will need a full breakdown of your expenses,
• some lenders have cashback offers for refinancing, but you're better off looking at the overall cost of the loan than being too focused on the cashback - it may end up costing you more; and
• there are often some costs associated with refinancing (which can usually be covered with the new loan). We'll help you work out how long it will take you to break even and start saving.

The take home point is that there are so many variables to consider when refinancing that it is best to speak with a professional about your situation. 

Your current or prospective lender should not be your main source of information. Lenders can only advise you on their own products and have no obligation to put your best interests above their own. On the other hand, mortgage brokers are legally obligated to put your best interests above their own, and can advise you on a range of products, often at no charge to you.

Your accountant and financial adviser are both great at helping you grow your wealth and meet your tax obligations, but unless they are also a qualified mortgage broker, they don't have the right expertise for helping you assess and refinance your loan.

So, if you are thinking about refinancing, your first step should be to get in touch with a mortgage broker, because loans are our specialty.