REFINANCING: THE INS AND OUTS
WHO'S REFINANCING AND WHO's NOT
* One in three mortgage holders have never refinanced
* The average amount saved by refinancing is just over $400 a month or almost $5000 a year. twenty per cent save more than $500 a month and seven per cent trim around $580 a month or nearly $7000 a year.
* The main reason people don't refinance their mortgage is failing to consider it as an option. Others simply don't get around to it or find the idea too complicated.
* Most refinancers plough the savings back into their mortgage while a quarter put them towards paying off bills and debts.
* Going for the lowest loan rate is tempting but check the fine print. Honeymoon rates that come back to bite, hidden ongoing fees and charges and the absence of redraw and offset facilities are pitfalls to watch for.
* For those with less than 20 per cent equity, be aware that lenders mortgage insurance may leave you out of pocket.
* Check on how long the loan will take to be approved. Some lenders are struggling to meet deadlines meaning opportunities can be missed.
Source: homeloans.com.au survey May 2021
Australian Associated Press