If you’re having trouble making the payments on your home each month, it will always be tempting to refinance your mortgage and work out a new arrangement that’s more realistic for you financially. This is a big step, though, and once you take it, it’s hard to turn back. Is now really the right time to pull the trigger and make the big refinancing move?
There are definite pros and cons. On one hand, if you look at today’s market, there appears to be a favorable financial climate for taking out new loans at the present interest rates. On the other hand, refinancing is not without its risks, such as hefty fees and long-term debt risks, and you need to be sure you’re aware of the short-term and long-term costs involved.
Refinancing is at an all-time high
If you’re considering a refinance, you’re absolutely not alone in Australia today. In fact, according to Australian Broker News, refinancing is currently at an all-time high, with almost 22,000 mortgages per month being redone. Bessie Hassan, consumer advocate at finder.com.au, told the news source that people are pouncing as loan interest rates are currently low.
“With signs pointing to a rate rise in the near future, now is a great time for homeowners to consider refinancing,” Ms Hassan said.
Switching to a better mortgage now might save Australians thousands of dollars per year. The current low rates won’t stand forever, though, so the window of opportunity here might be limited.
Have you weighed all your options?
Due to the low interest rates on the market today, refinancing is a strong possibility for those who need it, but that doesn’t mean it’s the right choice necessarily. The Australian Securities and Investments Commission emphasises that it’s important for consumers to consider other options before refinancing, as a refi isn’t guaranteed to benefit them in the long run.
Savvy consumers know to talk beforehand with financial advisors and make sure the mortgage repayments being asked of them are reasonable, not just now but in the long haul. A mortgage is a big commitment, so caution is key.
How we can help you
If you indeed decide that refinancing your mortgage is the right decision, we have the resources to help you get set up. With over 30 lenders at our fingertips, we are confident we can find the ideal loan for you. Contact us if you’d like to learn more.