How refinancing could put more money in your pocket

The RBA cut Australia’s official cash rate to a historic low of 0.25% in March 2020. Since then, lenders have been in fierce competition with each other to offer the best rates.

As a result, both owner-occupied and investment loans now start in the 2s – one of the lowest rates in living memory. To further sweeten the deal, lenders are offering incentives to tempt sign-ups including cashbacks of around $2000 to $3000.

Many borrowers have seized this opportunity with both hands. According to the ABS, a record $15.1 billion worth of home loans were refinanced in May.

Refinancing could save you thousands

This low rate environment means now may very well be the perfect time to refinance – especially if you’ve been with your existing lender for some time. That’s because many lenders save their most attractive rates for their newest clients.

Refinancing can put more money in your pocket. Take our clients here at Eventus Financial, who’ve saved on average over $4,000 a year in interest by refinancing onto a lower rate.

That works out as a staggering $20,000 saving over five years.

But, remember, it’s not all about interest rates

While interest rates often get all the attention when people talk about mortgages, they are not the be-all and end-all when it comes to choosing a product that’s right for you.

Home loans can come with different features such as offset accounts, redraw facilities and the ability to make extra repayments. So the right home loan for you needs to suit your circumstances while having the flexibility to meet your goals.

For example, if you want to pay off your mortgage sooner, there’s no point choosing a product with an eye-catching low rate if it restricts the extra repayments you can make. That’s because you could end up paying more interest over the life of the loan than if you’d opted for a product with a higher rate but better features.

So it can be a good idea to get advice from a reputable broker before you refinance. They can help you consider all your options, and make sure the product works for you.

And that’s not all a good broker does

Australia’s home loan market is extremely competitive with dozens of lenders, each with their own products and eligibility criteria. To further complicate matters, lenders are currently changing their lending criteria frequently due to the economic downturn.

So, if you go it alone, you have to do all the research and shopping around yourself. Apply to the wrong lender, and you risk getting rejected. That isn’t just disappointing – it could also damage your credit rating, potentially making it harder to get approved for credit in the future.

Working with a good broker can take the guesswork, time and effort out of the home loan process. They’ll do the due diligence on your behalf, and only submit your application to a lender that best suits your situation. They don’t charge for their service as they get paid by the banks, but work for you.

Why choose Eventus Financial?

At Eventus Financial, we work with a panel of over 25 lenders. That means we’re often able to negotiate you a special discount due to our strong bargaining power. Once we find you a great deal, we make sure it’s still considered one in the future by conducting frequent reviews.

Want more money in your pocket? Eventus Financial has helped many Australians refinance onto a better deal – and we can help you too. Schedule a no-obligation consultation with Alex to find out more.