It is important to review your existing home loan before you refinance to find out if switching your home loan is the right option for you.
How to review your existing home loan:
1. Find out what type of loan you have. Is it variable, fixed or split?
2. How much interest are you paying per month?
3. What features does your home loan include? Offset account, redraw facility etc.?
Write down the answers to each of these steps. If you’re not sure where to find this information, then login to your online banking. Most home loan accounts list the details you’re looking for. If you cannot find these details online, then phone your lender.
Comparing your home loan options
Once you’ve got the information you need, then go online and compare your home loan options. Look at home loans that are similar to your existing loan in terms of loan type and features, but have a lower rate of interest.
Most financial experts suggest that your interest rate needs to be at least a percent lower than your existing home loan for you to make a saving. When looking at interest rates always consider the comparison rate as this gives you the true cost of a home loan over 12-months as it includes all fees and charges.
As you can see, it’s not difficult to determine whether you can benefit from refinancing. What is difficult though is finding the time to sit down and do this. So, if you find that you’re time poor and need help, then consider talking to an eChoice broker.