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.

• Related: Introducing Lendi’s Approval Confidence™. A global-first for home loans.

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.

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:

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.

*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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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.