It’s a question we get asked a lot: how often should I refinance? While advice will be tailored to your specific situation, it can be informative to see what other FundingPro property owners are up to.
How often FundingPro clients refinance:
| <1 | 1–2 Years | 2–3 Years | 3–4 Years | 4+ Years |
| 2% | 12% | 36% | 31% | 19% |
Less Than 1 Year – 2% |
2 Years – 12% |
2–3 Years – 36% |
3–4 Years – 31% |
4+ Years – 19% |
Is it time for you to refinance?
Although two-thirds of our clients refinance between 2 and 4 years after they take out their loan, we can help assess when makes best financial sense to refinance on an individual basis, including:
Break costs
Calculating your break costs can be a daunting prospect, however it’s important to offset these costs against potential savings on your refinanced loan in the short- and long-term. A lower rate or adjusted loan term could make you significant savings. We’ll collate and break down the costs precisely so you know where you’ll sit financially if you’re looking at breaking your fixed rate term.
Cash back offers
There are some compelling offers from lenders currently in-market. These are great for instant cash-flow but should be balanced against the interest-rate offered and whether another lender with no offer but a lower rate will be better for you and your loan in the long-run. We’ll run these assessments for you so you can make your decision fully informed.
Considerations in refinancing
Should you change your
loan structure?
Refinancing allows you to reassess what home loan features are working for you, or what features are not, particularly if your financial, work or housing situation has changed since you first took out your loan. You may look to split your loan, offset your interest, consolidate your debts or get a loan increase for property improvement.
Lock in a fixed rate or keep it flexible with variable?
Dependent on your life stage, you may look for certainty or flexibility in your loan. Fixed rate home loans give you certainty of your repayments and can offer compelling rates, but do come with break costs. Variable rates are susceptible to rate fluctuations but do give you flexibility to adjust your loan or make additional loan repayments.
Principal & interest,
or interest-only?
As your situation changes, it’s important that you’re getting the best out of your home loan. Interest-only allows you to have lower monthly repayments, but can increase the life-time interest of your loan. Principal and interest repayments are higher, but also mean that you are paying down your home loan balance and not relying solely on market increases or property improvements to build equity.
Extend, shorten or maintain
your loan term?
Making a decision on loan term has both short- and long-term financial consequences. In the short-term, an extension of your loan term will decrease your monthly repayments but will also mean you’re adding years of repayments (and interest) onto your loan. Shortening your loan term will give you higher monthly repayments but shave years off your loan. Alternatively, you may like to keep your current loan term on your new loan – you can take advantage of lower rates to lower your repayments and decrease your interest over the life of the loan.