What better way than to start a new new year, than to take a look at building new pathways to wealth. For some, refinancing and/or cashing in on increasing equity is a great way to open up savings. But we warn customers to look carefully at their options, because it’s not always a good time to refinance.
Refinancing is getting a lot of attention right now, as speculation builds about the Reserve Bank increasing the cash rate in 2023 or even 2022. Australian Bureau of Statistics data shows that refinancing activity is at near-record levels.
In the final weeks of 2021, a host of lenders, including all the big four banks, increased their fixed rates, which caused some more borrowers to consider refinancing. Others might be thinking about refinancing to take advantage of equity they've built up in their home during the ongoing property boom of the past 12 months.
If you’re thinking about refinancing, you’re not alone, but don’t let that sway you. If you listen to the media hype speculating on interest rate movements you can see why people are jumping into it, but it’s not for everyone.
Although we do recommend refinancing when you are in a position to, you should refinance only when it makes sense for your personal situation, not because other people are doing it.
Why do we recommend refinancing?
Depending on your scenario, refinancing might allow you to:
· Reduce your interest rate
· Switch your interest rate type (i.e. variable to fixed)
· Pull out equity to fund the deposit on an investment property
· Consolidate several higher-rate debts into a new lower-rate home loan
· Get a loan with better features
Are you curious to know if refinancing is right for you?
Call us. Together we can take a better look at your situation then and get you positioned right. I’ll be happy to talk you through the pros and cons.