We’ve been benefiting from historically low interest rates for a good few months now and if you haven’t thought about refinancing now would be a good time to explore that option.
On February 1 the Reserve Bank of Australia (RBA) board decided to leave the cash rate on hold at the historic low of 0.10 percent, which means home loan interest rates will stay down for now.
Banks are now offering fixed-rate loans for as low as 1.99 percent, interest rates we haven’t seen for years, and may not again once the market changes.
When is the right time to refinance?
This really depends on your personal and financial situations. But generally speaking if you have a secure job or earning potential you should speak to your mortgage broker.
It may also be a good time to refinance if:
- Your current lender’s interest rate is no longer competitive to what is being offered on the market.
- There are signs the Reserve Bank will raise interest rates.
- You need to consolidate debt. Consolidating debts into your home loan can be a cost-effective way to minimise repayments and reduce the amount of interest you’d end up paying long term.
Benefits of refinancing
Refinancing gives you the opportunity reduce your repayments but also could give you an avenue to access unused equity in your home loan so that you can renovate for example.
Switching to a home loan produce that even offers 0.5 percent less than your current rate could save you thousands over the term of your loan.
You may be able to access between $2-3000 in cashback deals from some lenders who are offering this type of incentive to those wishing to refinance.
Talk to your mortgage broker today so they can assess your personal situation and work out the best time for you to refinance.