- To find out if you could save, compare your current interest rate with offers available in today's lending market to see whether you're paying a competitive rate.
- Consider reviewing your loan/s. You could benefit from an interest rate reduction or from consolidating your loan.
With interest rates at record lows in Australia, this is a great time to do a home loan health check. Whether you want to reduce the financial pressure you're under, or pay off your home loan faster, refinancing can make a big difference to your short-term and long-term financial situation.
Could you save by refinancing?
To answer this question, compare your current interest rate with offers available in today's lending market, to see whether you're paying a competitive rate. BankVic's home loan comparison calculator can help you do the maths. For example, on a typical home loan of $400,000 even a small reduction in interest rates can save you hundreds of dollars a month in repayments and tens of thousands over the course of your loan.
As well as securing a better rate, refinancing could help you make other loan improvements too.
Angela Butera, Specialised Lending Manager at BankVic, explains how she helps refinancing clients look for big picture solutions.
A rate reduction with personalised service
For a Melbourne couple in their 50s, Angela recently combined two home loans into one low-fee loan while reducing their interest rate by more than 1%pa. As well as great savings, Angela's service style won them over.
"They wanted a more genuine and personalised service. They had already approached their former bank seeking a lower interest rate, initially receiving no reply, then finally being told a rate cut was not possible, despite having been customers for more than 20 years."
Due to the coronavirus, Angela met with the couple on a video conference call outside business hours to establish their home loan needs. In this case, the couple decided to take out a loan with a redraw facility to help make maximum savings on their repayments.
Reducing commitments on a property portfolio
For a Melbourne police officer in his 30s, Angela tidied up multiple home and investment property loans, merging five loans into four and securing lower interest rates across the entire portfolio.
"The refinancing goal was to get the structure right while reducing his commitments," she explains.
Only two years into a 30-year loan, a police officer and teacher couple from regional Victoria approached BankVic looking for a rate cut. After talking through their situation, Angela moved them to a 15-year home loan with no ongoing monthly or annual fees and a lower interest rate.
“They came to us looking for a lower interest rate but their underlying goal was to retire debt free in 15 years. We were able to meet both goals."
While reducing their interest, the couple determined that they were able to afford higher repayments to pay off the principal of the loan more aggressively over the shorter period.
Finding the right home loan
Whatever your financial situation, BankVic can help you move to a home loan product that meets your immediate needs and long-term goals. Our mobile lenders are available for phone or video chats and can assist you outside office hours if this is easier for you.