It’s official! There’s never been a better time to refinance

With rates now as low as 1.69%, repayments have dropped to $3,544 per month based on a $1,000,000 mortgage and a 30-year loan term. Many people are still paying over 3% for their mortgages, forking out at least $4,217 per month, based on the above metrics. This figure is likely to be higher given that most people’s terms would now be less than the initial 30 years. Also, several lenders are offering handsome cash rebates which will be credited to your account upon refinancing to their institution. Let’s break down these figures further…

If ‘John’ has a $1m mortgage with Bank A at a P&I rate of 3.00% and has 25 years remaining on his home loan, his repayments equate to $4,743 per month. If John refinances to Bank B at a 1.69% rate, with the same 25-year loan term his repayments are $4,090 per month. That’s a monthly saving of $653, a yearly saving of $7,836 and a total saving of $226,776 over the life of the loan. 

These figures don’t include the $4000 refinance rebate that John will receive upon his arrival at the new bank. 

Refinancing is taking between 2-3 weeks to finalise now, and the rebates lenders are offering tend to come and go, so it’s worth looking at your options today. The Tawny Frogmouth has teamed up with Shore Financial to make it quick and easy to get a free appraisal of your existing home loan. Make sure you have as much money as possible in your own pockets and not your lender’s coffers.