Refinancing
Lower repayments, consolidate debt, or access equity. Your current loan may no longer be the best fit.
Reviewing Your Loan Over Time
A question that often comes up in conversation is "how do I get ahead on my mortgage?"
The underlying principle is actually quite simple. A loan reduces faster when more money is directed towards it than the minimum required repayment.
How that happens will vary for each person. It might come from:
- a lower interest rate
- a pay rise at work
- reducing other debts
- improved budgeting
- using investment profits later in life
Sometimes people say "it's probably not worth the hassle of reviewing or changing my loan just to save $100 a month."
But I like to explain it like this. If someone walked in the door and handed you $100 every month to complete a bit of paperwork, most people would probably take it.
If that same $100 was then directed towards your mortgage each month, the impact over time can be significant.
For example, on a $500,000 loan over 30 years at an illustrative interest rate of 6%, contributing an additional $100 per month from the beginning of the loan could:
~2.5 years
reduction in loan term
~$57,000
saved in interest
These figures assume a constant interest rate and consistent additional repayments and are provided as a simple illustration of how additional repayments can affect a loan over time.
Starting With Your Existing Lender
One of the first things we do when reviewing a client's loan is go back to their existing lender and ask whether their current rate can be improved.
In many cases lenders are willing to review pricing when asked. If a better rate is available without changing lenders, that is often the most straightforward option.
This is one of the reasons we believe periodic loan reviews are important.
Sometimes the outcome is:
- a lower rate with your current lender
- confirmation that your rate is already competitive
- identifying that another lender may be worth considering
Remaining with the same lender can sometimes be the right decision. In other situations, changes in rates, policies or loan features may mean it is worth exploring alternatives.
A Thoughtful Review
At Wealthfin, a refinance review is not simply about chasing the lowest rate.
It is about understanding whether your:
- loan structure
- pricing
- features
- and long term plans
still align with your broader financial position.
Sometimes the right decision is to move.
Sometimes the right decision is to stay.
The important part is making that decision with clear information.
Ready to Review Your Loan?
Book a free refinance assessment and see if you could save.