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Is refinancing the answer?

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Switching to a new loan or moving to a new lender to take advantage of a lower interest rate may sound like an easy way to reduce your repayments. However, the shift can be very costly.

With at least two more interest rates predicted for this year, it's prudent to take stock and reassess your financial position. If you've borrowed to the hilt, you're undoubtedly feeling the uncomfortable squeeze of higher repayments. Even if you're not worried about your repayments eating into your household budget, now is still an ideal time to give your mortgage a health check.

When deciding whether to refinance or switch your existing mortgage by paying it out with a new mortgage or new lender, you should take into account your whole financial situation - not just the home loan. If done properly, this new mortgage should have a lower interest rate, lower costs or more appropriate features for your situation.

In the latest issue of Your Mortgage, we show you how to determine whether switching is the best course of action during this time of rising interest rates.

Should I refinance?
Things to consider before switching:
• How large are my monthly repayments compared to my income?
• Am I paying ongoing fees on my current mortgage?
• Do I have any other debts? Are these short term or long term?
• If I rolled my debts into my mortgage, how much would I save per month?
• Can I get a better interest rate or more loan features if I switch?
• Will my existing lender charge deferred establishment fees for switching?
• How do the costs of switching compare with how much I'll save?

For the complete article and practical tips on how to manage your mortgage, read the latest issue of Your Mortgage, on sale now.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

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