You can get multiple companies that provide home loan refinancing offers in Australia for a lower rate. It involves paying off a current loan with a new one to shorten the loan term and make extra home repayments to own your home within a short period.
Getting a home loan refinancing offer is a good option especially when the interest rate is low because it reduces the cost of borrowing. However, it costs a little money as you take out a new mortgage to pay off the older one.
Read on to learn more about the 7 best home loan refinancing offers in Australia.
Key Takeaways:
- What A Refinance Offer Is.
- How Refinance Offer Works.
- The 7 best Home Loan Refinancing Offers In Australia.
What Is A Refinance Offer?
A refinance offer is a proposal that involves modifying the terms of an existing credit agreement, usually of a loan or mortgage.
When an individual refinances a home loan, they make satisfactory changes to the payment schedule, interest rate, etc. To take the place of the original loan agreement.
Thus, a home loan refinancing offer is an agreement that involves taking out a new loan to pay off the initial loan of a home to reduce the home loan term and amount and also lower the interest rate.
Refinancing is a reasonable alternative for debtors or borrowers who find it difficult to pay off their loans as it results in lower monthly payments but it gives rise to the loan amount to be paid.
The Importance Of Home Loan Refinancing Offers.
Refinancing a home loan has its benefits for the borrowers which include:
1. Shorter Loan Term
Refinancing your home loan reduces the term of repayment of the loan.
2. Low Monthly Payment
A refinance offer helps in lowering the monthly payment of a home loan to an affordable amount.
3. Enhances Credit Score
Refinancing a home loan when the rate is low improves credit scores.
The Downside Of Home Loan Refinancing Offers
Though a home loan refinancing offer is a good option for having absolute control of your home, there are some disadvantages associated with it which include:
1. High Cost
Refinancing a home loan for a long loan term results in smaller monthly payments, but accrues high interest in the long term. Also, a prepayment penalty is involved while refinancing a home loan which may cost a whole lot of money.
2. Extensive Procedure
Refinancing a home loan takes a long time because the new lender will have to enquire about the borrower’s credit history. The long processes equally lead to low credit scores.
How Refinance Offers Work
Refinance offers enable borrowers to receive more favorable borrowing terms in modifying the original loan. It generates satisfactory shifts in economic conditions.
Refinance offers helps to reduce the payments involved in a loan. However, borrowers tend to refinance when their credit profile is enhanced and the interest rate is low.
To refinance, there must be a lender (either a new or an existing lender) to re-analyze a borrower’s credit terms and financial situation for the completion of the new loan application.
For instance, businesses may refinance mortgage loans on commercial properties when the rates are low to improve the credit profile of the business.
To get the refinance offers, a borrower must apply for them. This gives the older or new lender the chance to get exact information about the home.
The lender assesses the borrower’s income, debt, assets, and credit history to determine his or her requirement level for the refinance followed by other options given to the borrowers such as lock-in interest rate, refinance rate, and floating rate. These enable the lender to underwrite the process provided the information is accurate.
The lender also helps in providing home appraisal to the borrower and when completed, the new loan offer is closed.
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The List Of The 7 Best Home Loan Refinancing Offers In Australia
Taking out a home loan refinancing offer can be a remarkable undertaking. Hence, here are the 7 best home loan refinancing offers in Australia.
1. Nano-Variable Home Loan
Nano-Variable Home Loan offers a low variable rate starting from 5.14% p.a for investors and owner-occupiers with a loan-to-value ratio of 80% or less.
The home loan comes with no fees and it has an offset sub-account with a Visa debit card.
Nano-Variable Home Loan allows paying with Google pay and uses an app to enable managing your finance.
It is the best for New and Low-Cost Home Loan types.
Features
- It has a low rate starting from 5.14% p.a for owner-occupiers to 5.44% p.a for investors.
- Repayments are made monthly.
- It has an offset sub-account.
2. Athena-Straight Up Home Loan
Athena provides home loan refinancing offers in Australia called Straight Up Home Loan. It is a competitive mortgage for customers who want a good rate with effective online services.
It is a simple home loan refinancing offer with an excellent low rate and easy-to-set-up, thus, making it easier for home buyers and investors.
A borrower of such a loan can receive 80% of the property’s value.
Features
- It has an interest rate of 5.29% p.a and 5.17% p.a (comparison rate).
- It has a 50% minimum deposit.
- It gives an automatic discount as the loan is paid off.
- It also offers free additional repayments and redraws.
You can learn more from the video below:
3. HSBC-Discounted Home Loan Value
HSBC is a worldwide bank that provides home loan refinancing offers in Australia.
The Home Loan Value gives the most competitive variable interest rate.
However, HSBC’s low-interest home loan has an ongoing variable interest rate that starts and remains low, with a simple application process. Thus, you may apply for the refinancing offer now.
Features
- Flexibility in Repayments: It has unlimited free additional repayments.
- Low Fees: There are no monthly service fees.
- Low Rate: The interest rate is 4.59 p.a% while the comparison rate is 4.70 p.a%.
- It provides a $3,288 cashback offer.
4. OneTwo-Variable Rate Home Loan
Variable Rate Home Loans, being one of the best home loan refinancing offers in Australia is provided by OneTwo at a lower variable rate of 4.84% p.a for owner-occupiers who want to refinance their existing home loans.
It gives an interest rate discount of 0.03% whenever 5% of the original loan is paid off.
The loan points to minimizing cost thus, not offering an offset account or allowing redraw on extra repayments.
Features
- It has no offset account.
- It has a low rate of 4.84% p.a (comparison rate of 4.76% p.a).
- It offers free additional repayments.
5. Qudos Bank-Fixed Rate Home Loan
The Fixed Rate Home Loan is one of the home loan refinancing offers in Australia provided by the Qudos Bank.
Qudos Bank gives a comparison fixed rate starting from 5.19% p.a for a year term. It also allows a 5-year term as an investor or an owner-occupier enabling you to lock in an undertaking that suits your needs.
However, it is the best refinancing offer for anyone seeking to break into the property market due to its 10% minimum deposit.
Features
- It has a lower rate of 5.19% p.a (5.01% p.a comparison rate).
- It has a minimum deposit of 10%.
- Low Fees: It has no application or annual fees.
- Flexible Repayments: It gives free additional repayments of up to $10,000 a year.
6. ING Mortgage Simplifier
ING provides a home refinancing offer known as Mortgage Simplifier. It has variable rates for investors and owner-occupiers.
As an owner-occupier, you can take out the loan with only a 10% minimum deposit.
Though it offers a redraw and the option to get a split loan, it has a $299 upfront fee.
Features
- ING Mortgage Simplifier gives free additional repayment and a redraw facility.
- It offers a $3,000 cash back for refinancing.
- It has a low rate of 4.74% p.a and 4.76% p.a (comparison rate).
7. Ultimate Home Loan Package Special
The Ultimate Home Loan Package Special is a refinancing offer from the Queensland Country Bank.
With this offer, you can bundle your daily banking as the package provides everyday banking access, the option to take out free personal loans, and a Visa credit card. It also offers discounts of 10% (off your premium for the first year) on home insurance.
The rate starts from 4.94% p.a. and the comparison rate is 5.27% p.a. Ultimate Home Loan has a $350 annual fee.
Features
- It has an offset account
- It has no establishment or discharge fees
- It offers daily banking access.
Conclusion
A refinancing offer allows revising and shortening the term of an existing credit agreement that relates to a loan.
However, a home loan refinancing offer enables homeowners to pay off the initial home loan with a new loan thus, reducing the term and repayment amount of the loan.
It is always advisable and a good option to refinance your home loan when the rates fall to have a low monthly payment.
You can get a refinance offer at a lower rate through the aforementioned home loan refinancing offers in Australia.
FAQs
Here are discussed the answers to some of your questions about home loan refinancing offers in Australia.
Which Bank Is Best For Home Loan Refinancing?
The Bank of America is the best for home loan refinancing.
Does Refinancing Damage Credit Profile?
At first, refinancing harms your credit score but it enhances it after one year.
At What Rate Can I Refinance?
You can refinance if the new rate is 1% lower than the initial rate of the home loan.
How Do I Negotiate Refinance Rates?
You can negotiate to refinance rates by:
- Shopping with different lenders.
- Strengthening your mortgage application.
- Requesting lower interest rate offers from your lender.
- Negotiating with discount points.
What Credit Score Do I Need To Refinance?
You need a credit score of 620 or higher to be able to refinance a home loan.
What Is The Latest Rate On A Refinance?
The latest interest rate on a refinance is 6.72% APR on the National Average 30-year fixed refinance.
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