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When should I refinance?

26 February 2021 | 5 min read

You may have lost trust or favour in your bank. Or you’re simply looking for a better deal…

There are numerous factors that make people start looking and ultimately make the decision to up and leave their home loan provider.

Here are a some of the top reasons people refinance and some tips on how to weigh up and work out what’s most important to you. 

A better deal

While refinancing your home loan to get a better deal is certainly a good reason to switch, there are plenty of others too.

Most people think the interest rate is the be-all and end-all of home loan appeal.

It’s important, yes, but not as important as the comparison rate.

Wherever you see an interest rate advertised you should, by law, see the comparison rate.

Think of it as the effective, or true, interest rate as it considers any fees that you’ll pay on the home loan.

Aside from price, people often refinance their home loan to give them more flexibility.

Some home loans restrict the number of extra repayments you’re allowed to make without penalty. Others do not.

Some home loans charge you a fee to redraw the extra repayments you’ve made if you need them. Others do not.

And some home loans may require you to repay the loan over a shorter period meaning the repayments are higher. Others may offer you a longer term with lower repayments.

A better deal is about more than price.

Some of the biggest benefits you can get when refinancing your mortgage may be in other features like how much you can offset your loan and whether you can do so on a fixed loan or just a variable loan.

You're looking for better service in a bank

Personal service (or lack of) is one of the top reasons people decide to take their home loan to another bank.

Apps, websites, online help desks. Love them (99.9% of the time).  

But in certain circumstances - and especially with important matters like a mortgage – knowing you can pick up the phone or to talk to someone face-to-face to work through any changes, is a real comfort and actually a very important feature that we may take for granted when start shopping for home loans and get caught in the mindset of comparting rates and offsets.

Will I have a dedicated lender to work through the initial process?

Who can I go to, to talk about my loan after it’s settled?

Is there a local call centre that I can reach? 

Knowing what support you can expect if you ever need to make changes on your loan is something that’s worth understanding.

Especially when you consider the fact that a typical loan term in Australia is somewhere between 10–30 years.

That’s a long relationship in anyone’s book and a lot can change in this time.

So, if personal service and peace of mind are things that you rate, then you should factor this in, in your home loan ‘must-haves’ list. 

You’ve got your eye on a big-ticket item

Refinancing isn’t always about switching banks. If you’re happy with your bank you can refinance your home loan and stay put.

Why would you do that? You might need to do some renovations, you might have your eye on a new car, a dream holiday, your kids’ education, or a thousand other reasons for which you need extra cash. If you’ve got equity in your home (equity is the difference between what your home is worth and how much you owe), refinancing can unlock that equity for all kinds of purposes.

For big ticket items it’s often cheaper to refinance your home loan than to take out a personal loan at a higher interest rate.

Multiple debts are stressing you out

Credit cards, personal loans, overdrafts, oh my! For some people juggling multiple debts is a choice. For others it can be a stressful burden.

Refinancing can offer a simpler and often more affordable solution. Refinancing can allow you to consolidate your debts, so you need only manage your home loan repayments. And, because credit cards and other loans often come with higher interest rates, you can save money by paying these debts out with your home loan.

Next steps

Regardless of whatever it was that made you start thinking about refinancing - the good news is that it’s never a bad time to look.

Take a moment to consider your situation. Is it time to look for a better deal or better service? Is there something big on the horizon? Does consolidating your debts make sense?

If you’ve answered ‘yes’ to any of these questions, chat with your Bendigo Bank home loan specialist who will happily guide you through the refinancing process.

Angela Dickins, mobile lender for Sunbury and surrounds.

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ANY ADVICE PROVIDED IN THIS ARTICLE IS OF A GENERAL NATURE ONLY AND DOES NOT TAKE INTO ACCOUNT YOUR PERSONAL NEEDS, OBJECTIVES AND FINANCIAL CIRCUMSTANCES. YOU SHOULD CONSIDER WHETHER IT IS APPROPRIATE FOR YOUR SITUATION. PLEASE READ THE APPLICABLE PRODUCT DISCLOSURE STATEMENT(S) ON OUR WEBSITE BEFORE ACQUIRING ANY PRODUCT.

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Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. Any advice provided on this website is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable Disclosure Documents before acquiring any product described on this website. Please also review our Financial Services Guide (FSG) before accessing information on this website. Information on this page can change without notice to you.

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