When Should You Refinance Your Loan? Evaluating the Right Timing for Your Financial Goals
If you’re having trouble making the payments on your home each month, it will always be tempting to refinance your mortgage and work out a new arrangement that’s more realistic for you financially. This is a big step, though, and once you take it, it’s hard to turn back. Is now really the right time to pull the trigger and make the big refinancing move?
There are definite pros and cons. On one hand, if you look at today’s market, there appears to be a favorable financial climate for taking out new loans at the present interest rates. On the other hand, refinancing is not without its risks, such as hefty fees and long-term debt risks, and you need to be sure you’re aware of the short-term and long-term costs involved.
Refinancing is at an all-time high
If you’re considering a refinance, you’re absolutely not alone in Australia today. Lender’s are offering some of the lowest rates ever seen, alongside special deals to entice mortgage holders to make the switch.
According to the Australian Bureau of Statistics Head of Finance and Wealth, Katherine Keenan, “The value of refinancing between lenders was 60 per cent higher in July 2021 compared to a year ago. This reflected borrowers seeking out lower interest rates, particularly for fixed rate loans, and cashback deals across a large number of major and non-major lenders.”
Have you weighed all your options?
Due to the low interest rates on the market today, refinancing is a strong possibility for those who need it, but that doesn’t mean it’s the right choice necessarily. The Australian Securities and Investments Commission emphasises that it’s important for consumers to consider other options before refinancing, as a refi isn’t guaranteed to benefit them in the long run.
Savvy consumers know to talk beforehand with mortgage specialists and make sure the mortgage repayments being asked of them are reasonable, not just now but in the long haul. A mortgage is a big commitment, so caution is key.
How we can help you
If you indeed decide that refinancing your mortgage is the right decision, we have the resources to help you get set up. With over 30 lenders at our fingertips, we are confident we can find the ideal loan for you. Contact us if you’d like to learn more.