We look at 5 ways that home loan refinancing can help you:

1. Your lender’s rate is no longer competitive

We’ll start with the favorite first. One of the main reasons people choose to refinance their loan is to get a lower interest rate and put more money back in their pockets instead of paying the banks.

When done right, refinancing your home loan can save you thousands over the life of your loan and free up cash now.

2. You can switch between variable and fixed rates

Another popular reason to refinance a home loan is to switch between a variable rate and a fixed rate. With a fixed rate, some want peace of mind. So knowing exactly what their monthly payments will be without the option of changing them for a set period of time is worth a slight increase in the rate.

Conversely, you may decide that you would like to take advantage of a lower variable rate because you can accept the risk that rates may rise in the future.

3. You could qualify for a home loan with better features

There are some great private home loan company features these days, and refinancing can offer you the opportunity to take advantage of benefits or more flexible features. Some money saving features to look for are:

Flexible repayments: You may want to switch to a home loan that allows you to make lump sum payments with no fees or open an offset account to reduce your interest.

Overdraft: Allows you to withdraw emergency payments if you need cash. Look for a loan offering a free overdraft.

There are also some pretty cool boutique features like getting a repayment holiday (pause in your repayments) or loan portability which allows you to take your home loan with you when you move without much hassle.

4. You could consolidate your debt

Many of us have multiple debts such as a car or credit card along with our home loan. Our car loans and credit cards often have very high interest rates, meaning more out of pocket.