NEARLY HALF OF ALL HOMEOWNERS HAVE NEVER REFINANCED! ARE YOU ONE OF THEM?

Reception • Nov 27, 2017

A recent survey of Australian mortgage holders found 45 percent had never refinanced their home. This same report showed those who did refinance saved an average $240 per month ($2,880 per annum) by refinancing a 30-year loan.


Why consider refinancing?


The cash rate set by the Reserve Bank of Australia (RBA) is at an all-time historical low. Most lenders are offering the lowest home loan rates we’ve seen. When there are potential savings to be made, why do so many of us neglect to explore refinancing options? Apparently, we dislike talking about money!

A third of homeowners don’t know their home loan rate.

We must be clear. Any decision to refinance should not be based solely on securing a lower interest rate. At Future Finance Group, we consider your individual circumstances to determine if refinancing is suitable for your situation. Gone are the days of making minimum repayments at a similar interest rate over 25-30 years. We recommend that you review your home loan every two years. Times change, needs change, incomes change, expenses change and loan features change.


So, what are some of the reasons nearly half of us have never refinanced?


Research shows:


54% of borrowers claim to be happy with their lender


Which is valid but then most people only receive information from their lender. They can be unaware the market is now very competitive and other lenders or loans may provide greater benefits. It’s not just about rates either, with many loans offering features such as offset accounts and redraw facilities that could be right for you. Perhaps your loan includes a feature (with monthly fees) that you no longer use?



24% can’t be bothered with the paperwork


This is where your finance specialist comes to the fore as we do the work for you. The process is much easier than you think.



13% believe it’s too costly


Exit fees were banned for all loans which originated after 30 June 2011. If your loan was secured prior to this date, you will need to find out if an exit fee applies. Ask us! A new lender will often pay the exit fee for you when refinancing with them. Other fees may also apply and we will assess these to determine if refinancing delivers you an overall benefit.



9% think it is too hard to compare loans


Gathering an in-depth comparative analysis of a range of loans across multiple lenders is one of the key advantages of using a finance specialist. We aren’t tied to any particular lender. Your current lender will only look at alternate loans from their range of products.

Source and Links:

  1. Refinancing report-Apr 16
  2. Finder.com.au
  3. RFi, Australian Mortgage Council

*Disclaimer: This article is generic in nature. All investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of investment action. This is not deemed as advice. © 2017

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