Interest Rates have never been lower! Take advantage of them

When was the last time you assessed whether your loan is still the best fit for you and your circumstances?

With the official cash rate at historic lows and many people experiencing changes in their financial situations due to COVID-19, there is renewed interest around refinancing. 

 Is refinancing a good option for me?

It makes sense to take another look at your home loan and ask whether you could get a better deal – after all, what was the best option in the past isn’t necessarily the most beneficial one for you now. Perhaps your life circumstances have changed since you took out the original loan, you may be finding it harder to pay off the mortgage than you had anticipated, or you suspect you could be better off with a different arrangement.

Wanting to make the most of lower interest rates is a leading factor as to why people refinance. A lower interest rate may assist you in paying off your mortgage quicker or alternatively provide you with greater financial freedom with lower payments to manage your mortgage and your lifestyle.

Refinancing can also can be used to unlock equity in your home for a new project or investment, or provide the opportunity to consolidate your debts under a lower interest rate.

 Whatever your reasons for wanting to refinance are, there are of course benefits and considerations you will need to be aware of. While refinancing can enable you to consolidate your debt or stretch out your loan, the longer you take to pay off your mortgage will increase the total amount of interest you pay. This may offset the lower interest rate you’ve moved to over the length of the loan.

Ensure you clearly understand the transaction costs associated with switching loans, aside from early exit fees. Be wary of falling into the trap of refinancing too often, you may end up clocking up fees and costs.

 We can help you better understand the options available to you and help you decide if refinancing is a good move for you right now and if so, find a loan that suits your unique needs.

Stuart Fitzpatrick and Excel Financial Advisors Pty Ltd are authorised representatives of Interprac Financial Planning Pty Ltd AFSL 246638 registered office at Level 8, 525 Finders Street, Melbourne VIC 3000. This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information. Investment Performance: Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.