If you’ve got a high interest rate and feel like you’re paying too much for your mortgage, you may be asking yourself: “Should I refinance my mortgage?”.
It’s not as simple as comparing savings based on a different interest rate. It is highly recommended that you speak to a qualified mortgage broker about whether you should refinance your mortgage now or not.
You might see savings on your monthly repayments, but have you checked what hidden refinance costs there may be? You’ll likely have to pay a fee for the new mortgage product or lender set up costs so always factor these into the long term costs to see exactly what you’ll be saving in the long term if you refinance your mortgage.
Interest rates are usually the main consideration for home owners when it comes to the decision of whether to refinance or not. It can make sense to refinance if there are significant savings to be made, but only if there aren’t other costs that will negate the benefits of a lower interest rate.
Knowing what equity you have in your property is a part of the decision making process when it comes to refinancing your mortgage. If you’ve got more than 20% equity in your home, it could make sense to re-mortgage, but this will vary from case to case. It’s always best to seek advice from a qualified mortgage broker who can help you determine your property value and current equity before you re-mortgage.
Lock In Periods
If you’re still tied into your current mortgage product, have a look and see how long you’ve got left on it before it expires. There may be penalty fees for refinancing, even within the same lender, so calculate what these may be. This will help you work out how much you’ll really save if you refinance.
Loan Term Remaining
If your loan term left is short, it may not be worth spending money on refinancing. The cost of refinancing may outweigh the savings, so only consider if it is a long term saving solution.
Speak To A Mortgage Broker
If you aren’t sure whether to refinance your mortgage or not, definitely speak to a trusted mortgage broker. Our mortgage broker in Joondalup can help you work out the true cost of refinancing, not just what your repayment difference would be. Call us today or get in touch online now.