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How to refinance and save $2,832 in interest

Refinancing your home loan has the potential to save you thousands of dollars. Lendi is helping Australian homeowners save on average about $2,832* in interest over the next year of their home loans. And on average, Lendi’s customers reduce their interest rates by about 0.89%.

In this article we’ll explain how you can refinance to make big savings like this.

Find out if you’re eligible to refinance your home loan

It’s great that you’re interested in refinancing your home loan, but it’s important to make sure that you’re eligible to do so.

Lenders look for borrowers who have a history of making consistent repayments, a healthy credit rating and generally prefer borrowers with at least 20% equity in their home. Meeting these requirements indicates that you are a low risk borrower that the lender can trust to make repayments.

Lendi recently launched our Approval Confidence™ feature that allows homeowners to get an idea of the interest rates they are eligible for. Approval Confidence™ gives borrowers a quick and realistic insight into their home loan options without affecting credit ratings.

Understand why you want to refinance your home loan

There are many reasons why homeowners consider refinancing their existing home loan. Commonly, it might be to find a better interest rate or consolidate debt. However, you can refinance to extend or reduce your loan term, add loan features, switch between variable and fixed interest rates or even access some cash.

Your home loan should work with your changing lifestyle and finances, not against it. If you think your home loan doesn’t suit your situation anymore, it may be time to refinance.

How much does it cost to refinance my home loan?

Most homeowners are motivated to refinance by the prospect of saving money. So, it’s important to consider any costs that may arise during the process. If you’ll end up spending more money than you’ll save by refinancing, it may not be worth it.

Refinancing costs can include:

  • Property valuation: an authorised property valuation helps lenders determine if your property’s value has changed as it can influence your equity.
  • Break costs: borrowers on fixed interest rate home loans may be subject to break costs if they refinance before the fixed period is over.
  • Exit and discharge fees: exit fees may apply for home loans obtained prior to 1 July 2011. Discharge fees may be charged by your existing lender to cover any admin expenses from ending your existing loan.
  • Lenders Mortgage Insurance (LMI): LMI may be charged when you refinance before you have at least 20% equity in your home.
  • Loan features: loan features, such as offset accounts and redraw facilities, can help reduce the interest you are charged but may come with annual fees and fees for withdrawing funds.

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How can I make sure that I save money when I refinance?

In order to save money when you refinance, it’s smart to be open-minded and consider your options. Refinancing with your existing lender can help you avoid some of the fees commonly associated with refinancing. However, your existing lender may not offer the most competitive interest rates in the market.

Found out if your home loan interest rate is competitive:

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Lendi’s Home Loan Specialists provide free, expert advice and can guide you through the refinancing process. Make an appointment today to get started.

Why should I use an online home loan platform?

Online home loan comparison and brokerage websites like Lendi make refinancing easy. Our platform allows you to quickly compare a range of home loans from over 35 Australian lenders in one place.

Once you’ve found a home loan that you like, you can apply and get approved entirely online — you don’t even need to leave the house.

Any questions or hesitations? No problem, our expert Home Loan Specialists are here to help you refinance to a loan that suits your changing needs.

How much can you save by refinancing?

Find out what your new repayments might be in seconds.

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*The estimated average future interest savings is calculated as at 15 April 2020 based on Lendi assisting customers into new loans with an average interest rate reduction of 0.89% for the 11 months prior, and assuming a median loan term of 26 years on both the old and new loan and all monthly principal and interest repayments will be made on time. Any future savings figures are estimated averages only, and do not take into account any product features or fees (including refinancing or break costs). Your savings will be different.

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We're here to help. Get free expert advice at a time that suits you. Choose a time to chat with a Home Loan Specialist here

The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.

Tags: refinance, interest rate, home loan, lender, variable interest, fixed interest, saving, break cost

Check today's low rates

Tell us what you are looking for and see if you can save.

Search rates

Check today's low rates

Tell us what you are looking for and see if you can save.

Search rates
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Home loan repayment saver tool

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Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 35% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors. Lendi's board is majority independent and non-executive.
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
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