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Is it time to refinance?

Orica Financial Services Feature Article

Is it the right time to refinance?

It seems like every household bill is going up, as inflation hits everything from how long you can spend in the shower to how much you can put in your grocery trolley. The cost of housing – often the largest expense for many people – is not immune to this upward march.

This article explains everything you need to know about refinancing and whether it makes sense:

Is it time to refinance?

Many homeowners and investors are finding that their home loan repayments are changing. Those on variable rates are being impacted by the lifting of the official cash rate, which has seen lenders raise the interest rates on their variable loans. And those with a fixed-rate mortgage could be facing a decision about what to do when their fixed period ends and their new rate kicks in, which usually drives repayments up.

More and more Australians are refinancing, perhaps as a way to cut housing costs, figures from the Australian Bureau of Statistics (ABS) show. The value of loans that were refinanced in June was 17.8% higher than a year ago, and for owner-occupied loans it reached a “new record high” of $12.7 billion for the month, which was 24.6% higher compared to a year before. These numbers dropped slightly to around $12.4 billion and 13% in July 2022.

Who can refinance?

If you’ve owned your property for some time and have enough equity, made repayments on time, a good credit score and a steady income, there is a good chance that you may be able to refinance. Each lender has its own eligibility requirements that you will have to meet before you will be approved, similar to the ones you passed when you took on your existing loan. And, your existing loan may have conditions, such as fees, which could add to the cost of refinancing.

However, it’s important to note that not every borrower will necessarily be able to refinance. Typically, lenders will only allow borrowers with at least 20% equity to refinance – meaning that your loan is no more than 80% of what the home is valued at by the bank at the time you want to refinance. If your existing loan is fairly new and you paid a deposit of less than 20%, or if your property’s value has dropped, you may not meet this threshold.

Refinancers also need to meet other loan eligibility requirements, such as having a good credit score, a healthy record of repayments, and income requirements.

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When is the best time to refinance?

Although home loan interest rates are generally on the rise, this follows a period where they were at historically record lows. That said, there is a significant difference between the cheapest and most expensive rates available, which suggests possible savings for savvy refinancers. For the month of August, the average basic variable owner-occupier principal-and-interest home loan interest rate on Canstar’s database of lenders was 4.22%, with the lowest clocking in at 3.04%. The highest rate is more than double that at 6.79%.

If you are a borrower who has been in their house for five years or 10 years and you haven’t refinanced, you may find that you are paying way above the lower end of the market in terms of interest rates and It’s very possible that you could save hundreds of dollars a month by refinancing. Also, If you are on a package loan, it could pay to look at newer products that may not have been available at the time you first took out the loan.

Package loans are where a home loan is bundled together with other products offered by the financial institution lending the money, such as a transaction account, a premium credit card linked to a rewards program, and other perks. The loan itself usually has extra features included, such as an offset or redraw account. These loans often also come with extra fees, such as an annual fee (typically a few hundred dollars) and can have a higher interest rate attached as well, compared to a basic home loan product.

How do I get all the options?

In short that is exactly what we do for all our clients at Orica Financial Services, look at all the options and make sure you are getting the best deal. 

If you are thinking of refinancing to save money on your repayments every month then let’s complete a finance review, look at all the options and make sure you have all the facts before making a decision.

Enter your details in the contact us section and we can start the review process today. 

Is it time to refinance?

See how much you could save in repayments every month with our Debt Consolidation Calculator. 

Is it time to refinance?

See how much you could save in repayments every month with our Debt Consolidation Calculator. 

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Is it time to refinance?
Is it time to refinance?
Is it time to refinance?

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Is it time to refinance?

Save Time & Money

Here at Orica Financial Services, we are different from other brokers because we look at every positive aspect of your loan application before we make a recommendation on how you should move forward with your loan application.

There is no need to guess, call as at Orica today and we will help you with your loan application.

Lenders we work with

We have access to one of Australia’s largest lending panels, which means choice from over 60+ lenders and thousands of different loan options. 

Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?
Is it time to refinance?

Lenders we work with

We have access to one of Australia’s largest lending panels, which means choice from over 60+ lenders and thousands of different loan options. 

Is it time to refinance?

Non Conforming Loans

Good for getting you out of trouble, consolidating debt and lowering your monthly repayments

Borrowing up to 80% of the value of the residential property

Please note that lending policy, fees & charges apply

Is it time to refinance?

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Is it time to refinance?

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About Us

Our finance team look at all the options for you personally and compare all the lenders for the best possible deal.  

Free Tools 

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