Refinancing a home loan means replacing your current mortgage with a new one, usually to get a lower interest rate, better terms or access to extra funds. 2025 is a good year to reassess loan options, especially with interest rates dropping and a softening real estate sector. So, if you’re looking to refinance a home loan in Melbourne, you can find a good deal that better suits your financial situation.
By opting for a mortgage refinance, you can also reduce monthly repayments, and free up equity for renovations or investments. This also lets you save money over the long term. Additionally, it’s a great way to switch between variable and fixed rates, depending on your financial goals.
However, the decision to refinance your home loan solely rests on your shoulders. You may opt for this route due to personal circumstances or other reasons. Whatever the case may be, here’s why we think you should consider refinancing in 2025.
Cheaper Interest Rates
Bank rates fluctuate with time, and chances are that your current home loan interest rate is higher than the market rates. If that’s the case, refinancing could be a smart way to reduce monthly repayments. Even a small reduction can lead to significant savings over the life of the loan.
As a borrower, refinancing allows you to secure a lower rate and reduce repayments. However, it’s important to weigh that against any upfront costs. For instance, if you took a loan at 7% and the present rates sit close to 6%, refinancing could be a smart move.
Debt Consolidation
Another reason to refinance your property is if you wish to combine multiple debts into one. If you have multiple credit card bills, personal loans, car loans, and buy-now-pay-later debts, chances are you are paying high interest rates and extra fees. Through refinancing, you can combine these debts with a home loan. This means a lower overall interest and just one easy repayment to manage each month.
Change Lenders
Are you unhappy with your current lender’s customer service or fees? If that’s the case, changing to a new lender is a good option. You may find a good lender who offers more competitive interest rates and loan terms. Some may even offer cashback deals or other incentives, which makes the switch even more worthwhile.
Access Equity
A mortgage loan refinance lets you tap into the equity built up in the home over time. This can be useful if you are planning for home renovations, holidays, medical bills, investments or other expenses. When you refinance, the lender may allow access to some or all of this built-up equity.
Home equity is simply the difference between what is paid off and the value of your home. For instance, if you have a $5,00,000 home and $1,50,000 left to be repaid, then you have $2,50,000 in equity. This accessible equity gives you the funds required without having to take out a separate personal loan.
Split Loan Rate
When you refinance for better interest rates, mortgage structures like split loans offer both fixed and variable benefits. A fixed-rate home loan allows you to lock in an interest rate for several years. On the contrary, if rates are very unpredictable, a variable loan rate offers more flexibility.
Shorten Loan Term
Refinancing can also help pay off the mortgage faster and save on interest over time. It’s a great option for those who wish to become debt-free sooner. You can use our refinance home loan calculator to see how a shorter term could impact repayment figures as well as long-term savings.
Is Refinancing on Your Mind? Discover the Best Loan Options Today!
Refinancing isn’t just about getting a good deal. It’s about making smart choices in a changing market. So, before rushing into it, ask yourself ‘when’ and ‘why’ to opt for a home mortgage refinance in Melbourne. At 7 Mortgages, our team simplifies the complexities so that you can make an informed decision. Plus, we’ll make sure the best options are accessible. For more information, call us on 03 9544 2642 or 0413 277 413. Alternatively, you can also email us at atadmin@7mortgages.com.au.
