Refinancing – maximise the low interest rates by acting decisively with all the facts!
by Jules Knox | 20 June 2021


How refinancing can work for your home loan
Am I getting the best interest rate?
How to get the best deal

In a market of record-low interest rates, when banks are flirting with us to refinance and switch lenders, borrowers need to weigh up all the options to make sure they are getting the best deal, so that they can get the most out of the refinance and not just be tempted by short-term incentives on offer. Investors and owner-occupiers obviously want the best (lowest) rates; but currently new borrowers are getting sweeter deals. However, rates are just one part of the puzzle.

In a market that is difficult to predict due to global factors, and likewise our own personal lives can be challenging to plan as we live in unprecedented uncertain times; we need to make the most of the opportunities presented and make the benefits count both now and into the future.

There are many things to consider: what’s the cost of leaving one bank?  What’s the cost of entry to another? Are there hidden charges? Are you sacrificing the long term for the short term?  Will it cost you if you decide to sell or refinance again down the track, and if so, how much? All these questions can be easily answered when a skilled lending professional reviews your existing facilities.

The first thing a competent adviser will do is review your existing loans and compare them to what is currently on offer from all the lenders, then complete a cost-benefit analysis that takes not just the fiscal facts into account but also your short and longer-term financial goals. It may be preferable to negotiate with your existing bank or fix some (or all) of your current loan; or it may be preferable to move lenders to make the most of the current competitive lending conditions. And until you have that discussion and review, you really don’t know.  Learn more here.

If you already have a financial adviser or mortgage broker, you probably already know that you may want to act soon to consider locking in some of your lending at these record low rates. Your adviser or broker can also push your existing lender to match competitor rates – the rates they are willing to offer can depend on factors such as your overall lending amount, the loan-to-valuation ratio (the debt compared to the value of the property), your repayment type and whether the loan is for owner occupied or investment use. If your existing lender still isn’t looking too competitive, it may be worth switching to a new lender. However, when switching, don’t just focus on the lowest rates – depending on your needs, you may also benefit from a loan package that can offer multiple offset account linking, multiple loan splits, a fee-free credit card that earns you points (as long as you pay if off each month!), low ongoing fees and future changes to your loans at no additional cost.

There are certainly costs in refinancing your loans, such as discharge, application, and government fees, however depending on the lender, you may be eligible for a refinance rebate or cash back – these can often exceed the cost of refinancing. And if you are in a fixed loan thinking that refinancing is not an option for you due to hefty break costs, it’s still worth reviewing your options – you may find, even after break costs, that you are still better off overall, and the savings from the refinance can recoup the break costs in a relatively short period of time.

The financial landscape is ever-changing, and there’s no such thing as a set-and-forget strategy when it comes to getting the best long-term financial outcomes. It’s important to review your lending strategy at least annually, and there’s no better time than right now to make the most of the current competitive loan environment and access some very low interest rates. However, there may also be some opportunities to restructure your loans to really optimise your strategy, and having expert advice on getting this right can reap massive rewards. When opportunity knocks, you need to answer!


Share on Facebook

Share on Email

Share on Linkedin

Jules Knox
jules@evalesco.com.au | 0412 045 098 | 02 9232 6800


Sign up to get the latest insights with our newsletter delivered straight to your inbox

“How will I measure the value or success of receiving financial advice?”

We believe the true value of financial advice isn’t found in dollars and cents (although this is important too!) but in the peace of mind a financial plan can provide. It’s knowing where you want to go and how to get there, with a dedicated team behind you every step of the way.

“How do I know Evalesco is the right fit for me?”

We know the impact of good holistic financial advice can make and we have the life experience, technical capability and quality support team that can make that difference for you. We’ve empowered over 1000 families through the delivery of great financial advice, to be healthy, wealthy and happy.

“How do I know how much money I will need to retire?”

The amount of super you’ll need when you retire depends on your big costs in retirement and the lifestyle you want. The Associate of Superannuation Funds of Australia (ASFA) estimates for a single $44,224 a year and for couples $62,562 a year is how much you may need. This is only an indicator and our advisers assess everyone’s individual circumstances.

“Why should I pay for financial advice?”

The fees we charge for financial advice is only a fraction of the value we derive for our clients, meaning our clients are always better off after seeing us. Rarely do we encounter a new client invested appropriately for their needs, with adequate risk protection, structuring and estate planning provisions in place. Even small tweaks to a financial plan over a long period of time can result in drastically better outcomes for our clients which eclipses the fees of the financial advice. Additionally, you can opt-out of an ongoing fee arrangement at any time.

“How do you charge for your services?”

In our discovery meeting with you our advisers discuss the initial advice fee and the ongoing fees associated with our services.

“What is the process for getting our own personal financial plan?”

After our initial phone call to discuss why you are seeking a financial adviser, we arrange a discovery meeting that outlines what is important to you, your current position, our areas of advice, our approach. We then present a Statement of Advice (SoA) to discuss your goals and our recommendations and go through the steps of how to proceed to the implementation stage. After signing the SoA, we discuss your questions, get you to sign the authority to proceed and complete any application forms before implementing the recommendations detailed in the SoA.

“Should I pay more off my mortgage or put more money into super?”

One thing to consider is the interest rate on your home loan in comparison to the rate of return on your super fund. Before making a decision, it’s also important to weigh up your stage in life, particularly your age and your appetite for risk. Whatever strategy you choose you’ll need to regularly review your options if you’re making regular voluntary super contributions or extra mortgage repayments. As bank interest rates move and markets fluctuate, the strategy you choose today may be different from the one that is right for you in the future

previous arrow
next arrow

Evalesco Financial Services Level 17, 20 Bond Street Sydney NSW 2000
Phone: (02) 9232 6800

The information provided on and made available through this website does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Evalesco Financial Services do not warrant the accuracy, completeness or currency of the information provided on and made available through this website. Past performance of any product discussed on this website is not indicative of future performance. Copyright © 2019 Evalesco Financial Services. All rights reserved

Evalesco Financial Services Pty Ltd is a Corporate Authorised Representative (325313) of Australian Advice Network Pty Ltd.

ABN: 13 602 917 297 AFSL: 472901