Four great reasons to refinance your home loan

If you’ve had your home loan for more than a couple of years, your circumstances and needs may have changed. Factor in the last few years of rate changes, and your current home loan just might not suit you anymore.

So, reviewing your home loan could be worthwhile. It's a good way to check the loan is still meeting your needs and helping you to reach your financial goals.

Here are four reasons refinancing your home loan could be a good idea:

You’re worried about rising interest rates

Interest rates are a hot topic, so it’s a good time to assess if your current home loan is working for you and if there are any better deals on the market. You could consider a fixed interest rate for a portion of your loan so your repayments will stay the same regardless of any rate rises.

Knowing exactly what your repayments are can help you to get the most out of your budget or increase your savings, and help you reach your goals.

You want to renovate or buy an investment property

If you’re planning a renovation, refinancing can help you to free up the equity in your home to fund your goals. If your property has increased in value, you may be able to borrow against the equity in your home to fund renovations, or you could use the equity instead of a cash deposit to purchase an investment property.

Even if you’re still in the planning and dreaming phase, refinancing your current home loan could help you to save while you’re working out the details of your next move. Our BCU Bank home lenders can help you determine your available equity and work out the best option for your circumstances.

You have a savings goal

Whether you’re saving for a holiday, a new car or just want to build your savings account balance, refinancing your home loan can help make your money work harder – and build your savings.

Choosing a home loan with an offset account can be a good way to reduce the interest you pay on your home loan. Every dollar in your offset account “offsets” the balance of your loan, which reduces the amount of interest you pay each month.

These saving add up over time and you could end up paying off your home loan faster and saving a significant amount in interest over the life of the loan. You can withdraw your savings from the offset account at any time once you reach your goal.

You want to consolidate your debts

If you have multiple debts, bringing all your loans together into one can simplify your finances. Refinancing your home loan to cover all of your outstanding debt means you’ll have a single repayment and just one interest rate to think about. Your home loan rate may be lower than the interest rates of your other debts, such as credit cards and personal loans, so by consolidating, you could end up with a smaller total repayment amount.

While refinancing to consolidate your debts is likely to save you money in the short term, you could end up paying more in the long run. Consider putting what you save on interest or fees towards extra repayments to pay off your new home loan faster.

Important information

Banking and Credit products issued by Police & Nurses Limited (BCU Bank).

Any advice does not take into account your objectives, financial situation or needs. Read the relevant terms and conditions, before downloading apps or acquiring any product, in considering and deciding whether it is right for you. The Target Market Determinations (TMDs) are available on our website or upon request.