Cash-strapped? Here are 5 ways refinancing can help
Why now could be the time to refinance your mortgage and free up some cash
- If you’ve found yourself cash-strapped during the COVID-19 pandemic, refinancing your mortgage could help ease financial strain.
- Take advantage of record-low interest rates to significantly reduce your monthly repayments and secure a better deal on your home loan.
- With our free Rate Comparison service, you can refinance in a few short steps, so you can enjoy more breathing space when you need it the most.
Here’s How You Do It:
Step 1: Select your State below.
Step 2: After answering a few questions, you will have the opportunity to compare competitive rates and could be eligible for significant savings.
If you’re one of the thousands of Australians whose cash flows have been affected by the COVID-19 pandemic, it’s likely you’re concerned about your mortgage repayments. You may be wondering if you should consider refinancing your home loan to lower your expenses during this period.
But is now really the time to make important financial decisions? We’ve broken down why this time of uncertainty could, in fact, be the perfect opportunity to explore your options and secure a better deal on your home loan.
Head to Rate Comparison to compare home loans for free in a few short steps and see how we can help you save.
Why is now a good time to refinance?
Refinancing now could free up a significant amount of cash right when you need it the most. Switching home loans could reduce your mortgage repayments, so you can plan for the short-term impacts of the current climate.
Before you look into refinancing, it’s important to carefully consider your situation. Use your extra time at home to thoroughly go through your finances and work out if you will really be better off by refinancing.
If you do decide to explore your options, there are numerous ways refinancing can help get your finances under control as you navigate through this period.
1. You may pay less interest
After the Reserve Bank of Australia lowered the cash rate to 0.25 per cent in March 2020, we are currently experiencing the lowest interest rates in Australian history. Many Australians have already jumped at the opportunity to refinance and pay less interest on their home loans.
If you refinance now, you may be able to take advantage of these record-low interest rates and significantly reduce your repayments over the term of your mortgage.
2. Get a lump sum of cash through equity release
When you refinance, your new lender will carry out a valuation of your property and you will be able to access the difference between your loan balance and the value of your property. This is known as equity release.
There are two types of equity release: reverse mortgage or home reversion. The best option for you will depend on your circumstances, but both will give you access to a lump sum of cash you can use to put out any financial fires you may currently have.
3. Pay less on your other loans through debt consolidation
If you’re feeling the pressure from other debts in your life such as personal loans, credit card and car loans, refinancing is an opportunity to consolidate these into your home loan.
It means you will spend longer paying off each debt, but you will free up cash in the short-term by only paying one interest rate on these loans.
4. Dramatically reduce repayments by only paying interest
Finding a new home loan with an interest-only repayment period will significantly reduce your expenses during this time.
You won’t have to pay anything off your home loan amount for a number of years, you will only pay the interest. While your repayments will be larger once the interest-only period ends, if you need cash now, this could be a compelling reason to refinance.
5. Become debt-free sooner
If you still have a secure income, you could refinance to find a home loan with a reduced term, or one that allows additional repayments, so you can, in fact, repay your loan faster during this period.
How can I find a better deal on my home loan?
Have you decided that you’re in the right position to refinance your home loan? Our advisers are still on hand to help you find a better deal on your mortgage.
Rate Comparison is your one-stop shop for comparing, understanding and learning about your home loan options in Australia. Our comparison service is free, and you’ll also have the opportunity to speak with a licensed professional about your home loan decision.
It only takes four simple steps to help you compare and save. We start by getting to know you so we can recommend the best loan product to suit your needs.
Get Started Now:
Step 1: Select your State below.
Step 2: After answering a few questions, you will have the opportunity to compare quotes in your area and could be eligible for significant savings.
This article is opinion only and should not be taken as financial advice. Check with a financial professional before making any decisions.