When refinancing your mortgage makes sense
Many property owners don’t realise what a great opportunity mortgage refinancing may offer them. Refinancing is when you replace your existing mortgage with a new mortgage to take advantage of additional benefits. With many banks competing for new mortgage business, there’s a vast array of mortgage choices currently available. It’s this choice which creates great refinancing opportunities.
When deciding whether to refinance, there are three key questions to ask yourself: a) How much will I save on my mortgage repayments? b) How much will it cost to refinance our mortgage? and c) Can I access equity to make additional Investments? It usually makes sense to refinance if you can generate a large savings for a small cost. As an example, if you can reduce your interest on a 30year $400,000 loan by 0.5% you are positioned to save $60,000 in interest over the term of the mortgage. If it costs you $5,000 to close your existing mortgage, then you are well positioned to make a substantial long-term interest saving for a small up-front cost. It’s a sensible move to refinance in cases like this. In today’s market, competition for clients means that you can often find lenders who will contribute towards the costs.
Landen’s Director Jim Dionysatos believes property investors should carefully consider their refinancing options: ‘We are seeing some great deals in the mortgage market so it’s a great time to talk with your mortgage broker and ensure you’ve got the best mortgage available to you. By reducing the interest rate you pay, your overall investment return will increase, sometimes significantly. It’s a no brainer to at least investigate your options.’
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