Warren’s take on: The surge in home loan refinancing
Warren Dworcan – Managing Director of Finance Detective – comments on recent news.
The recent surge in refinancing can be attributed to increased competition between the lenders, low credit growth and increased consumer awareness.
Increased competition is a good sign of a healthy credit environment and can only be beneficial to consumers.
I would suggest that if you have a loan and have not reviewed it in the last 12 months, now would be an excellent time to do so. Many lenders are offering competitive interest rates and refinance rebates. So in some instances, it will not cost you anything at all.
I have just helped an existing client, let’s call him as Mr West (for privacy reasons). We managed to negotiate a special rate at a new lender with a similar & comparable loan product. We helped him save a considerable $4,620 in interest per year.
In addition, we secured a refinance rebate of $1,250. Total refinance fees came to about $900 so he is ahead by $350 from Day 1 (bonus!).
In summary:
| Home Loan amount | $700,000 |
| Previous interest rate | 4.65% |
| Current interest rate | 3.99% |
| Interest savings | $4,620 pa |
| Refinance rebate (minus fees) | $350 |
| Total benefit in 1st year | $4,970 |
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The end result was one happy client. If you want to save money too, you should review your home loan today.