The basic concept of refinancing is switching from one loan to another. There are many reasons people choose to do this but one of the most common is because they want to lower the repayments on their home loan.
It’s pretty simple, really.
If you find a lower interest rate than what you’re currently on, you’ll end up paying less interest on a weekly and monthly basis. If you calculate those savings across a few years, you can potentially save yourself thousands of dollars.
For example, if you had an interest rate of 4.2% p.a on a loan size of $500,000 for 30 years your monthly repayments would be $2,694. If you then found a new interest rate of 3.6% p.a your repayments would drop to $2,530 a month, saving you $164 a month. That’s nearly $2,000 a year!
If this is something you’re keen to look into, we’d have to do some other calculations and have a look at your loan structure to make sure refinancing is the right option for you.
If you want to have a chat about how you can lower your repayments, reach out and let’s talk.
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