Find out the details of your current loan and determine what changes could assist you in meeting your financial goals.
Use a home loans comparison service to look for a great-value product that matches your needs.
Speak to an expert
Our Home Loan Consultants can put you in touch with a Mortgage Broker who may be able to negotiate a better rate with your current lender or help you with your home loan refinance.
Have your property valued (if the last valuation is over 12 months old), especially if you’ve completed renovations.
Undergo a full application process, credit analysis, documentation and assessment with a new financial institution.
Complete your financial institution’s legal and mortgage documents.
Receive unconditional approval for the refinance.
Transfer the ownership of the property to your name.
No, it’s usually unnecessary to hire a conveyancer when refinancing your own home loan since you’ll have already sorted out the settlement, title transfers and legal obligations at the time of initial purchase, related to the process of buying a home.
As the conveyancer’s role is to ensure the smooth purchase or sale of your home, their services will be redundant during the refinancing process. However, you may wish to hire a lawyer to represent your interests in the refinancing process with the lender’s lawyers.
You can refinance your mortgage at any time, though it’s favourable to have 20 percent equity before refinancing (less than an 80 percent loan-to-value ratio) and, if you have a fixed interest rate loan, to not have a long fixed term remaining. However, there are several factors that you may want to consider before deciding to refinance, including:
The process of refinancing your home loan can take as long as the initial loan you applied for – up to 60 days or more, especially if you’re refinancing to a different institution. The only difference is that you won’t be exchanging a purchase or sale contract.
Refinancing will cost you money. However, the costs may vary depending on your circumstances. Some common costs may include:
You need at least five per cent equity to refinance. If you have that, you can usually refinance at any time if you have good credit. However, it’s a good idea to refinance with at least 20% equity in your home.
The better your credit and the more equity you have, the less chance there is that they’ll charge you a higher interest rate or make you take out LMI.
While you don’t need a down payment to refinance, you’ll need at least five per cent equity in your property.
Yes, you can refinance a fixed mortgage rate, however, you should be wary of termination break fees, which can be especially expensive if you refinance early in the fixed interest loan term.
Closing costs are associated with the refinance or loan settlement. You may not be able to avoid this cost. However, you can look for a better deal by comparing loans and by negotiating these fees with your new lender. It always pays to compare!
Unless you’re a serial refinancer, refinancing your home won’t permanently affect your credit score. Refinancing may stay on your credit history for about two years, but it may only affect your credit score for a short period (e.g., 12 months) as you can rebuild your score by staying on top of your repayments.
Whenever a formal credit enquiry is submitted, your credit score can be affected. If you’re closing an account (i.e. your current loan) to which you’ve been making consistent and timely repayments to, your score may dip because you’re closing something that’s had a positive effect on your score.
However, you can build up your credit score easily as long as you continue making consistent and timely repayments to your new lender. If you’re refinancing to consolidate your debts, this can also have a positive impact on your credit score.
If your application is denied for any reason, it won’t affect your score, but it may show up in your history on your credit report.
Refinancing with your current lender may not necessarily have a ‘better’ interest rate, but it certainly will be easier and cheaper. Your current lender has all your information, so the process will be much simpler than if you switched to a different financial institution.
Keep in mind that regardless of who you go with, you’ll still have a formal credit enquiry on your credit record, which will impact your score.