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Get smart and refinance your home loan

·4-min read
People's Choice (People's Choice)

To get more money in your pocket, you could work harder, or longer. But, since the pandemic, career advisers suggest many of us are unwilling to go back to the office grind, and certainly not for additional hours. We’re prioritising personal fulfilment, not the treadmill of career aspirations, but we still have to pay the bills.

For many of us, a home loan is one of the biggest financial commitments we make in our lives. However, it’s also something we can tend to ‘set and forget’. But you could save money by switching your mortgage.

Refinancing to a new loan with a more competitive interest rate cannot only save thousands of dollars in interest over the life of a loan but put more money in your pocket on a weekly, fortnightly, or monthly basis.

If your property has increased in value, it’s likely to be even easier to refinance your home loan to a lower interest rate as lenders favour borrowers with higher equity.

Use this mortgage comparison calculator to see how much you could save.

Products that suit members, not shareholders

People’s Choice is 100 per cent member-owned, with any profits made invested back into creating products and services for members, not shareholders’ pockets. They’ve been empowering members since 1949 to create the life they want.

Today, members are among 4.5 million Australians who choose to do their banking with an organisation that is owned by its members.

They include singles, couples and families who are community-oriented and look for value-driven services, including low-fee banking, so they have the money they need for their lifestyle.

Refinancing to save

Getting more money in your pocket is a great motivator for changing mortgage providers.

Refinancing to a home loan with an interest rate that is a quarter or half a per cent lower than what you’re currently on might not seem like a big deal. But even this can mean a substantial reduction in interest repayments over the life of the loan.

Use this home loan calculator to work out repayments, calculate stamp duty and estimate borrowing power and savings.

Choosing a new home loan that allows you to make unlimited repayments without any break costs or fees can also help you save even more money by paying off your loan faster.

Get a Basic Variable Home Loan with People’s Choice and there’s no application, settlement or monthly administration fee. A Fixed Rate Home Loan lets you lock in your interest rate for between one and five years.

You’ll be able to choose how often you make repayments – weekly, fortnightly or monthly – and make extra repayments of up to $10,000 a year to pay off your loan faster.

Other reasons to refinance

While a lower interest rate and low fees are important factors when choosing a new home loan, there are other features that could influence your decision to refinance.

Maybe you’re interested in a redraw facility, allowing you to access extra cash if you’re ahead on repayments.

You may also be attracted to an offset account that links your loan and your transaction account to help reduce the interest and time taken to pay off your loan.

If you like the sound of consistent monthly repayments but also the flexibility of variable features, a split loan with a fixed rate for part of your loan and a variable rate for the rest could be for you.

Consolidating debts, such as a credit card or car loan, into your mortgage is also a way to simplify your finances.

The loan you need to make it happen

To find out more about refinancing your home loan, get in touch with People’s Choice.

This article is for information only and is not intended to constitute financial advice. Any views expressed are the views of People’s Choice Credit Union solely. This information must not be relied on as a substitute for financial planning, legal, tax or other professional advice.

People’s Choice Credit Union, a trading name of Australian Central Credit Union ABN 11 087 651 125, AFSL and Australian Credit Licence 244310. In this article, People’s Choice Credit Union is referred to as People’s Choice.

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