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Refinancing can help you find a home loan that is better suited to your current personal and financial situation. If you’ve had the same loan and interest rate for a number of years, you may be paying more than you need to. Read on to find out some of the reasons why you might consider refinancing your home loan. 

## 1. Interest rates are at a historic low

Interest rates are currently the lowest they’ve been in decades, so if your rate is more than 18 months old, you may be overpaying. By refinancing, you could save substantially. Homeowners who refinance with Lendi save an average of $2,832 in interest over the next year of their home loan.

- __Related: __[How to refinance and save $2,832 in interest](https://www.lendi.com.au/inspire/finance/how-to-refinance-and-save-interest/)

It’s always smart to compare your existing [home loan interest rate](https://www.lendi.com.au/inspire/finance/home-loan-hacks-2021-get-the-best-rate-post-pandemic/) with other rates on offer. Over the past couple of years, interest rates have dropped to historic lows. This means that if your current home loan is more than a few years old, you are very likely paying more in interest than you need to. 

Check what interest rates your existing lender is offering to new customers. Your lender is likely to offer you these reduced interest rates if you have a history of consistent repayments and good [credit](https://www.lendi.com.au/inspire/finance/6-ways-to-improve-your-credit-score-quickly/). Just call and ask!

If you don’t want to directly get in contact with your lender about refinancing to a lower interest rate, Lendi can negotiate on your behalf. Get in touch with a Home Loan Specialist [today](https://www.lendi.com.au/book-appointment/). 

You can easily compare home loans and interest rates on Lendi’s [online platform](https://www.lendi.com.au/owning-property/refinance/), so don’t forget to consider other lenders. 

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- __Related:__ [Aussies are being charged a loyalty tax by banks, confirms RBA](https://www.lendi.com.au/inspire/insights/aussies-being-charged-banks-loyalty-tax-central-bank-confirms/)

## 2. Your income has changed

Have you had a significant increase or decrease in your income? It might be time to consider refinancing your home loan. 

With an increased income, you might be in a position to make larger monthly repayments which could help you [pay off your home loan faster](https://www.lendi.com.au/inspire/finance/hacks-to-pay-off-home-loan-faster/). If you don’t want to refinance to a loan with a shorter repayment period and larger monthly repayments, you still have options if you’d like to take advantage of your higher income. 

On a variable interest rate home loan, you have increased flexibility that allows you to make uncapped extra repayments. When you refinance, you may also be able to add loan features, such as an [offset account](https://www.lendi.com.au/guides/offset-account/) or [redraw facility](https://www.lendi.com.au/guides/home-loan-redraw-facility/) to help reduce your interest charges. 

Experiencing a [decrease in your income](https://www.lendi.com.au/inspire/finance/how-to-get-financially-fit/) can make it difficult to make your minimum loan repayments, so refinancing can make things easier for you. This might be a good time to reduce your monthly repayments and extend your loan repayment term. The longer you take to repay your loan, the more you’ll end up paying because of interest. So, it’s a good idea to seek a home loan with a low interest rate and low or no annual fees. 

- __Related:__ [How to spring clean your finances](https://www.lendi.com.au/inspire/finance/how-to-spring-clean-finances/)

## 3. You’d like more flexibility or more stability

If you have a home loan with a [fixed interest rate](https://www.lendi.com.au/guides/fixed-rate-home-loan/), you get a reassuring sense of stability in that your interest rate is fixed for a 1-5 year period. On the downside, compared to a variable rate loan, you have limited flexibility. 

With a [variable rate](https://www.lendi.com.au/guides/variable-rate-home-loan/) home loan, you can make unlimited additional repayments and add on loan features that aren’t usually available for fixed rate loans. By making [extra repayments](https://www.lendi.com.au/inspire/finance/aussies-pay-off-home-loan-faster/), you can pay off your home loan faster and pay less in interest. If you receive a bonus from work, a tax refund or another unexpected sum of money, you could put it straight towards your home loan. 

Many fixed rate home loans still allow you to make extra repayments, but they are usually capped at a certain amount annually. However, with a fixed rate loan, it’s great to know that your rate is protected from any market volatility during your fixed period.

If you do decide to refinance out of a fixed rate loan before the fixed period ends, you may be subject to [break costs](https://www.lendi.com.au/inspire/finance/loan-break-costs-explained-how-to-avoid/). 

## 4. You feel overwhelmed with different debts

Having a number of loans and credit cards that you need to pay off can be overwhelming. You can streamline your debt into one monthly repayment by [consolidating your debt](https://www.lendi.com.au/home-loans/debt-consolidation/). The types of debt you can consolidate with your home loan are:

- Credit cards
- Personal loans
- Car loans

These kinds of debts often have high interest rates, so by bundling them with your home loan, you only have to make one monthly repayment that is subject to the home loan interest rate. This can help you to better organise your finances and avoid missing payments. 

- __Related:__ [Watch: The pros & cons of home loan debt consolidation](https://www.lendi.com.au/inspire/finance/video-debt-consolidation-home-loans-pros-cons/)

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## 5. You’d like to access equity funds

Your equity indicates how much of your home you own outright. It’s not solely determined by how much you’ve paid off your home loan, but also the updated value of your home. So, if the market changes, or you’ve made improvements to your home — your equity can change. 

There are many reasons why you might like to [access funds from your equity](https://www.lendi.com.au/inspire/finance/how-to-tap-into-your-home-equity/). Maybe you’d like to [renovate](https://www.lendi.com.au/inspire/finance/how-to-fund-your-renovation/) or book a trip, but you’re short on cash. Or you plan on buying another property or a new car.

Whatever the reason, through a home equity loan, you may be able to access part or all of your equity. Home equity loans are a good alternative to other consumer loan options, like car and personal loans, that have high interest rates. 

- __Related:__ [Guide to equity home loans](https://www.lendi.com.au/guides/equity-home-loans/)

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## Got a home loan question? Just ask!
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](https://www.lendi.com.au/book-appointment/)

*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.*