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Money habits

How to successfully refinance your home loan

10 November 2021


There’s several reasons you may decide to refinance your existing home loan. Perhaps you’re looking for better customer service or a lower rate, or you want to purchase an investment property.

Whether you’re looking to stay with your existing lender, or you’re thinking of changing to a new one, refinancing has its advantages. However, the process can be a little tricky. Before you jump to a different home loan, it’s worth knowing the ins and outs of the process to make sure it goes as smoothly as possible.

Refinancing your home loan: Why it can make sense

A better interest rate

Lenders will often reserve their best interest rates for new customers. If you’re thinking about refinancing, do your research and find out what the most favourable going rate is. You may also want to ask your current lender what they can do – simply asking could help you negotiate a much better deal.

Don’t forget to consider the advertised comparison rates. A comparison rate will tell you a loan’s interest rate in addition to the other costs and fees involved, where the headline interest rate only takes into account the interest rate itself.

Greater equity for investment or renovations

Refinancing your home loan can give you more flexibility with your finances. Moving to a different loan structure could free up funds to help you renovate or invest the equity you’ve built up in your existing property.

Renovating your home or purchasing an investment property can help to shore up your financial future, but both choices come with additional costs and risks. Make sure to discuss your plans with a financial advisor before committing to anything.

Debt consolidation

Refinancing may also present opportunities for debt consolidation. If you have multiple debts, consolidating them is a way of simplifying your finances by rolling them into one loan.

This may be useful if you have weighty credit card debt – your home loan interest rate is likely to be much lower than that of your credit card. It’s important to bear in mind that while debt consolidation can make it easier to repay your loans, you’re still required to pay back what you owe. So, if you roll your credit card debt into your home loan, you could be paying it off over the term of the loan. If your home loan spans decades, it could potentially cost you more in interest repayments.

It’s common for people to stick with their existing lender, with many borrowers keeping the same loan for years. Having a candid conversation with your current or potential lender about refinancing is a great way to test the waters. Suncorp Bank offers many features across a range of loans. 

Refinance Your Home Loan With Suncorp

Suncorp Bank’s Amber Nijenhuis explains how our home lending experts can help you calculate your potential refinancing savings and make the refinancing process as simple and fast as possible.

1. Check in on your current home loan

The first step in refinancing is to check in on your current home loan. What do you like about it? Or, more importantly, what don’t you like about it? Understanding these things will help you to identify whether it’s the best home loan for your current situation, and whether you should choose to refinance or not.

2. Compare mortgage lenders and fees

Once you have a better idea of what you’re looking for in home loan, it’s time to compare different lenders and fees.

A useful starting point is to consider what your financial situation will look like in a few years’ time. You’ll need to keep in mind the costs associated with refinancing and determine whether a new rate will be cheaper for you over the life of the loan.

There are several other elements to keep in mind when comparing different lenders, including:

  • Customer reviews and ratings
  • Special features or offers
  • Comparison vs advertised rates
  • Estimated monthly repayment

If you’re unsure about whether refinancing is a good option for you, talking to a financial planner or mortgage broker could help clarify things.

3. Apply for the new home loan you’ve decided on

Once you’ve decided on a home loan that’s right for you, you’ll have to apply for it.

What you’ll need to provide in your application will be different depending on whether you’re refinancing with your existing lender or a new one. Your current lender will have your information on hand, however a new lender will not. If you’re applying with a new lender, you’ll need to provide all your personal and income details, along with any other debts and your credit history. Since you’re applying for a new loan, the lender will need to assess you for serviceability – they need to be sure you can afford your repayments.

Following the pre-approval of your new home loan, your lender will assess the value of your property. If you’re changing lenders, this is the stage where they’ll contact your current lender to arrange a transfer. You’ll also need to pay any exit fees for your new loan to be finalised.

Finally, your new home loan contract will be sent to you as part of your mortgage documentation. Once you’ve signed and returned your contract, your new loan is ready to be settled.

If you’d like to find out more about refinancing your home loan, Suncorp’s expert Mobile Lenders can answer any questions you might have. Get in touch today for an obligation-free consultation to better understand whether it could be right for you.

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Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product.

Banking products are issued by Suncorp-Metway Ltd ABN 66 010 831 722 AFSL No 229882 Australian Credit Licence 229882 (“Suncorp Bank”) to approved applicants only. Please read the relevant Product Information Document, Lending Fees and Charges and the Home Package Plus Terms and Conditions before making a decision regarding any Suncorp Bank products. Fees, charges, terms and conditions apply and are available on request or on our Product Information Documents and Forms page.