One thing to take into account when looking at refinancing your home loan is that it will be much more affordable and much easier to do if your current home loan is on a variable interest rate.
If you're on a fixed rate, you're likely going to incur some pretty hefty break fees that may take away any sort of advantage of refinancing.
Let’s assume that you are on a variable rate home loan, and you're looking to refinance. It is then a matter of working out:
1. What is the interest rate you're currently on?
2. What's the new interest rate going to be?
3. And what does that equate to as a monthly saving?
The next step that we encourage you to do is look at the areas where you can potentially cut back. These can include things like groceries and driving. Then also look at areas where you wouldn’t cut back on.
Keep in mind with a variable interest rate, it’s going to cost you around $750 all up to switch home loans. If you know you are going to incur $750 to change your home loan and is it worthwhile to do that?
