What is a Refinance Home Loan?
There are many options when it comes to choosing a home loan and we offer them all.
What Is a Refinance Home Loan And How Does It Work?
Whether you’re looking to buy an investment property, looking into debt consolidation, wanting to change your loan terms or just refinance your home to free up some extra money, refinancing can be a suitable option for you and your family. The mortgage you chose when you first purchased your home may no longer suit your financial situation, and there may be better options on the market today, with more relevant features for you. Perhaps you are worried about an interest rate rise and want refinance home loan options with a fixed interest rate. When you refinance a home loan, you basically switch from one to another, with the benefit of using your existing home loan repayment history and any equity you have in your home. Refinance home loan options can save you thousands of dollars over the life of your loan and can save you money immediately.
Stamp Duty Calculator
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Important Disclaimer: This is intended as a guide only. Values used in the calculations are subject to change.
Our Refinancer Loans
Can I Use a Refinance Home Loan To Buy An Investment Property?
A popular way to buy an investment property in the current market is to refinance your home loan, taking advantage of the equity you have built up over the years.
What is equity?
When you buy a home and start paying off your mortgage, whether you choose a variable or fixed interest rate home loan, two things will happen. Firstly, the value of your property should slowly increase. Secondly, your home loan amount slowly decreases. The amount of equity you have in your home is calculated on the difference between what your home is currently valued at, and how much you still owe on it. As an example, if your home is worth $500,000 and your mortgage is $250,000, you have equity of $250,000. The loan terms, loan length or loan type does not affect your equity amount.
So, what does all this mean if you want to buy an investment property? Your equity can be used as leverage to apply for a home loan and buy an investment property. If you love the suburb where you live, and understand why others do, being able to refinance your home and act quickly to snap up an investment property in the same neighbourhood can be a big benefit to your financial situation going forward. Even if it’s not a house nearby, buying an investment property by being able to refinance your home can be a sound financial strategy. The more equity you have in your home, the bigger deposit you will have. That can lead to favourable loan terms and make it easier to secure a second home loan. Importantly, as the equity in your investment property grows, so does the equity in your current home. It can be common for people to build up a good investment property portfolio starting from a strategy to refinance.
Do I Pay Stamp Duty If I Choose a Refinance Home Loan?
Stamp duty is a tax, or a duty, on written documents and on some transactions, including the transfer of property, both residential and investment property. If you are building a house, including an investment property, you may only be required to pay stamp duty on the land. In Australia, stamp duty is administered by state and territory governments, which means how much you pay depends on where you live. In some states and territories there can be exemptions for first home buyers, or first home buyers in regional areas. That’s where our Stamp Duty Calculator is important. Make sure you enter the information in as accurately as possible, and you will get a breakdown of the duty you will pay, as well as any fees that can come with administering it.
When it comes to refinance home loan options for either debt consolidation or renovations, stamp duty can become a little more complicated. In some states, if you refinance your home and don’t purchase an investment property, you may have to pay stamp duty if the amount you refinance is in excess of the original loan. Speak with our lending specialists if you have any questions about how stamp duty impacts your refinance home loan. The good news is you can include stamp duty in your loan amount.
How Can I Calculate My Borrowing Power?
If you’re looking to apply for a refinance home loan, whether it’s for debt consolidation, to find a better mortgage deal, renovate or to buy an investment property, then having an idea of how much you might be able to borrow before you lodge the application can be a big help. If you have not applied for a refinance home loan before it can be hard to get a clear picture of your overall financial position. But looking to refinance your home with the knowledge of your borrowing power behind you means you can narrow down, or even expand, your financial options. If you are searching for an investment property, you can do so with a clearer price in mind.
If you want to renovate, understanding your borrowing power can help you set a realistic budget, and might mean you can even afford the finishing touches you always wanted. And having strong borrowing power might help get you a better deal on debt consolidation or your refinance home loan. This is where our Borrowing Calculator can be a big help. Enter all the required details below, as accurately as you can, and we will give you an indication of what your borrowing power may be. Not only will it help you in your quest for a refinance home loan, but it will give you an indication of what your repayments and loan terms can be, as well as how much you might pay in interest over the life of the loan. It is important to understand that all this information is a guide, and more refinance home loan information can be obtained from our lending specialists.
How Much Can I Save By Switching Home Loans?
Giving your home loan a health check from time to time is always a good idea, whether you end up choosing a refinance home loan or not. It is always good financial practice to have a look at your current loan terms, understand how the interest rates and repayments impact your budget, and whether there are any other options out there that may be more suitable for you and your family.
Switching home loans can help you:
- Save money with lower repayments and a lower interest rate
- Find better features
- Identify equity for an investment property or to invest in shares
- Consolidate your debts
- Upgrade a room in your current home
If you have used our Borrowing Calculator before (above), you already have an indication of your borrowing power. But how much can you save from, for example, moving to a fixed interest rate for a few years, finding a lower variable rate or extending the life of your current loan? Our Switching Calculator can give you an indication of just that. Enter the required information in as accurately as you can, and you should be able to unlock the potential savings that choosing a refinance home loan can give you. Find out as much as you can about your current loan, what the details of your preferred refinance home loan are and include all the fees and charges that can result from switching home loans. Once you have done that, we will show you a comparison of how much you pay now and how much, or less, you could pay if you switch. It really is that easy.
How Can An Offset Account Save Me Money?
Mortgage House’s refinance home loan range includes mortgages that feature an offset account. An offset account is a feature that can save you thousands of dollars over the life of your loan, and at the same time act as a nest egg for the future. All you need is a non-interest-bearing bank account. Whatever is in that bank account will be offset against your mortgage. The interest calculated is the difference between the two, rather than just the mortgage itself. If you want to refinance your home loan and have some savings, an offset account can be a way to motivate you to build up your savings, but still use them for emergencies. Other features that may be attached to Mortgage House’s refinance home loan options include:
- Additional repayments. The option of making extra repayments without being penalised financially.
- Redraw allows you to withdraw any additional repayments or extra lump sum payments at any time, for any reason.
- Loan portability. Take your home loan with you when you move.
Can I Refinance With a Fixed Interest Rate Home Loan?
Choosing a fixed interest rate refinance home loan can be a good decision, especially if the rate is competitive against your current mortgage, and you believe interest rates may be on the move up. A fixed interest rate home loan is one where the interest rates are fixed for an agreed period, usually between 1 and 5 years. They can be beneficial because a fixed interest rate is immune from the fluctuations of the national and international economy. No matter what official interest rates do, a fixed interest rate will remain at the same level as the day you signed on, for the agreed term. That can be helpful for your budget, as you know repayments will stay the same, no matter what. A fixed interest rate refinance home loan can be an attractive option for a year or two, to help you get your finances back in order, especially if you are choosing to refinance your home for debt consolidation.
The other kind of refinance home loan available is a variable interest rate loan.
- Variable home loan. Choosing a variable refinance home loan means your interest rate can increase or decrease over the life of the loan. There can be a number of both internal and external variables that can impact interest rates, such as the national or world economy, the official Australian cash rate or the cost to the bank and lender of providing you with the home loan.
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Your Monthly Repayment
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You Can Borrow Up To
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Important Disclaimer: This is intended as a guide only. Details of terms and conditions, interest rates, fees and charges are available upon application. Mortgage House’s prevailing credit criteria apply. Please note that your actual fortnightly repayment would be equal to the monthly repayment amount divided by two. Weekly repayments would equal the monthly repayment amount divided by four. If you choose to pay fortnightly or weekly, your actual repayments will be higher than repayments shown on this page. You can reduce the term of your loan if you choose to make repayments fortnightly or weekly. We recommend you seek independent legal and financial advice before proceeding with any loan.
What Is a Refinance Home Loan And How Does It Work?
Giving your home loan a health check from time to time is always a good idea, whether you end up choosing a refinance home loan or not. It is always good financial practice to have a look at your current loan terms, understand how the interest rates and repayments impact your budget, and whether there are any other options out there that may be more suitable for you and your family.
Switching home loans can help you:
- Save money with lower repayments and a lower interest rate
- Find better features
- Identify equity for an investment property or to invest in shares
- Consolidate your debts
- Upgrade a room in your current home
If you have used our Borrowing Calculator before (above), you already have an indication of your borrowing power. But how much can you save from, for example, moving to a fixed interest rate for a few years, finding a lower variable rate or extending the life of your current loan? Our Switching Calculator can give you an indication of just that. Enter the required information in as accurately as you can, and you should be able to unlock the potential savings that choosing a refinance home loan can give you. Find out as much as you can about your current loan, what the details of your preferred refinance home loan are and include all the fees and charges that can result from switching home loans. Once you have done that, we will show you a comparison of how much you pay now and how much, or less, you could pay if you switch. It really is that easy.
Repayment Calculator
Repayments
| Repayments | Total Payable | |
|---|---|---|
| Current Loan | $843.86 | $151,894.23 |
| New Loan | $790.80 | $142,343.23 |
| Savings | $53.06 | $9,551.00 |
Important Disclaimer: This is intended as a guide only. Details of terms and conditions, interest rates, fees and charges are available upon application. Mortgage House’s prevailing credit criteria apply. Please note that your actual fortnightly repayment would be equal to the monthly repayment amount divided by two. Weekly repayments would equal the monthly repayment amount divided by four. If you choose to pay fortnightly or weekly, your actual repayments will be higher than repayments shown on this page. You can reduce the term of your loan if you choose to make repayments fortnightly or weekly. We recommend you seek independent legal and financial advice before proceeding with any loan.
