How to Compare the Best Home Loan Refinance Offers and Save Thousands

Home loan refinance can be a great business decision where you can reduce the monthly payment, shorten your loan term, or cash in equity to invest in other properties. If you do have the right approach, you can save thousands of dollars on a mortgage in the future. Now with all the home loan refinance options available, it is wise to be prudent with the options available to you, so you get the best home loan refinance deal. At Efficient Capital, we want to help you make the best choices around home refinancing. Below you can see a step-by-step method that you can use to compare the home loan refinance deals based on the important features such as home finance rates, fees, and loan terms.

What is Home Loan Refinancing?

Home loan refinancing is when you get a new mortgage to pay off an existing mortgage. The usual reason for refinancing a home loan is to take advantage of better options and/or a lower home loan rate.

The primary reasons for refinancing a home loan are:

• Lower Rates: Lowering your home loan rate will generally lower your monthly repayments, total interest paid and save you a staying in the total life of the loan.
• Using Equity: Obtaining a home loan refinancing can enable you to access the equity in your home to help pay for renovations or maintain an investment or help to consolidate debt.
• A Better Loan: If you are refinancing to a better home loan, such as a loan with redraws or offset accounts, you will have more flexibility and leverage of money.
• Reduce the Loan Term: If you refinance to a shorter mortgage term, clearly you will pay less in interest and own the home quicker!

If there are so many refinance home loans to compare, comparing them thoroughly is the way to secure the best deal.

Major Elements to Compare in Home Loan Refinance Quotes

To obtain the best home refinance quote, note the following major elements:

1. Compare Home Finance Rates

Home finance rate is one of the most critical factors determining the price tag of your loan. A small variation in interest rates can lead to enormous savings in the long term. When comparing home loan refinance quotes, consider:

• Fixed or Variable Rates: Fixed rates will give you certainty of repayment, while variable rates could give you flexibility and an initial lower rate. Determine which will best fit your financial objectives.
• Comparison Rate: This is a comparison rate that combines the interest rate with most fees and charges and gives you a better idea about the true cost of the loan.
• Market Trends: Research current rates of home finance to ensure that the offer is competitive. For example, if rates are falling, a variable rate may prove to be more advantageous.

Efficient Capital recommends making use of internet comparison websites or consulting a mortgage broker in order to ascertain the most favorable rates available for home loan refinancing.

2. Evaluate Fees and Charges

Although a low home finance rate is tempting, there may be lurking fees that whittle away your savings. Typical fees for home refinance are:

• Application Fees: Paid when establishing the new loan.
• Valuation Fees: Paid to estimate your property’s worth today.
• Exit Fees: Some lenders have exit fees for closing off your current loan.
• Ongoing Fees: Account-keeping fees that recur monthly or yearly.

When you’re reviewing home loan refinance offers, calculate the cost, initial and ongoing, to ensure the saving is more than the cost.

3. Compare Loan Features

Not all home loan refinance offers are equal. Look for features that suit your economic needs, such as:

• Offset Accounts: These minimize the interest you have to pay by matching your savings into the loan balance.
• Redraw Facilities: Let you redraw extra repayments, with the freedom to use them for unexpected expenses.
• Flexible Repayment Options: Some loans allow you to make extra repayments at no cost, enabling you to pay off your loan earlier.

Study the terms of these options, as they can significantly impact the total worth of your home refinance.

4. Loan Term and Repayment Options

Length of the loan will dictate your monthly payment and total interest costs. If you choose shorter loan terms, you will have a higher monthly payment but less total interest payable. If you choose longer-term loans, you will have lower monthly payments, but may pay even more interest. Take the time to analyze offers on the search for your home loan refinance options and find the loan length that meets your budget and plans.

5. Lender Reputation and Customer Experience

A lender’s reputation and level of customer engagement are going to dictate an efficient home loan refinancing experience. Research the lender’s reputation using their online rating system or customer reviews and say if they were responsive. At Efficient Capital, we take the extra step of introducing our customers to reputable lenders that will deliver best in class service on their home loan refinance transaction.

Comparing Offers for Home Loan Refinance

To help you get the most savings and the best home loan refinance offers, you should take these steps:

Step 1: Look at Your Loan

Look at your existing loan for the interest rate, balance, and exit fees. This will give you a rough idea if refinancing makes sense to you financially. You may even want to check an online refinance calculator for the potential savings you could get with a new home finance rate. 

Step 2: Decide Your Reason for Refinancing

Are you in need of a lower monthly payment, shortening your loan term, or access more equity? Whatever your reasons may be will affect how you shop for home refinance offers, and will help assure you are zeroing in on the most important things for you.

Step 3: Compare Offers

Use comparison websites, lender websites, or go to a mortgage broker and receive a shortlist of home loan refinance choices. Pay strict attention to home finance rates, fees, and loan provisions. Attempt to compare a minimum of three to five alternatives so that you possess an overall view of the marketplace.

Step 4: Calculate Total Savings

When shopping around for home refinance deals, calculate the total of the new loan cost, interest charges, and fees paid over the entire term of the loan. Compare it with what you currently have to get potential savings. For example, reducing your home finance rate by 0.5% on a $500,000 loan would save you tens of thousands over 25 years.

Step 5: Seek Professional Advice

Refinancing a home loan can be complex. A mortgage broker, like the professionals at Efficient Capital, can provide professional guidance, access to special home refinance offers, and negotiating better terms for you.

Things To Avoid When Refinancing

To get a great home refinance rate, avoid the following mistakes:

• Only Thinking About The Rate: A low home finance rate could be negated by high fees or tough conditions.
• Not Considering Break Costs: If you have a fixed-rate loan, if you break it you could incur costs that are considerable. Make sure you factor these in.
• Not Considering Long-Term Costs: A loan that is low-cost at the beginning, may come with higher ongoing costs and/or a higher interest rate that can erode your savings.
• Not Finding out about the loan features: Ensure that your loan has features such as offset accounts or redraws that can benefit your financial plan.

How Efficient Capital Can Help?

At Efficient Capital, it is our work to help Australians secure the best home loan refinance offers. Our expert mortgage brokers go around for you from among hundreds of loans offered by established lenders, ensuring that you receive a competitive rate of housing finance and best conditions. We make home loan refinancing easier for you, delivering personalized suggestions as per your own economic needs.

Conclusion

Consideration of multiple home loan refinance offers is an important step towards realizing savings, and underlying financial goals. By considering the important components of home finance as they relate to the interest rates of home finance, fees, loan terms and lender reputation, you will be able to make an informed decision that can save you thousands of dollars for the entire life of your loan. Do not hesitate to spend money on research, calculating an approximate amount of savings or getting professional advice in order to make your home refinance a worthwhile endeavour.