Ask us about Refinancing

We all have different goals and dreams and the benefits of refinancing your home loan, can definitely expedite their realisation.

Getting a better interest rate to reduce the size of your mortgage will also reduce your monthly repayments.

Also, consolidating debts such as credit cards, car loans or tax debt, into one monthly repayment can really help wipe the slate clean and help you get ahead again.

Refinancing can also help you access equity to renovate your existing property, build a new house, buy an investment property, go on a holiday or even just to have some extra funds in the bank.

No matter what you are trying to achieve, refinancing can certainly give you a kick start.

There are so many different loans out there in the market and it can be really hard to determine which, is the best home loan, for you among all the marketing noise.

Here is your RealRenta checklist to help you decide:

·       Fixed Rate Loans

These loans give you certainty because you know up-front what your annual repayment is going to be.

So once you know what you are going to receive in rent, you can estimate if you are going to have a surplus or deficit and manage cash-flow accordingly.

There are some cons, many lenders will charge you a break fee if you repay more than the fixed rate allows for and if you want to refinance during the term of the loan.


·       Variable Interest Rate Loans

This type of loans means your payments will fluctuate.

You could potentially benefit from interest rate reductions and if the loan has a redraw facility, you will be able to redraw funds from any extra payments you have made.

You can also choose a split loan with a mix of fixed and variable interest rates.


·       Interest Only Loan

As the name suggests, you won’t pay anything off the principal with this loan.

So if the value of your property increases, you will have equity but if the market flattens, you may not have any equity, apart from your original deposit.

The good thing for investors is that interest only payments are tax deductible.


·       Offset  Accounts

Offset accounts allow you to use your mortgage as an offset account with greater flexibility and interest calculated daily..

For instance, you could have your salary paid into your offset account which is linked to your home loan.

The balance of your mortgage will be reduced by your offset balance and you will pay less interest over the long term and you will still be able to withdraw your cash when you need it.

It is worth noting that most offset accounts are linked to variable rate loans rather than fixed.


·       Lines of Credit

This loan allows you to use the equity in your existing property to secure your investment loan.

Rather than receiving a lump sum, you can access as much of the loan as you need.

This kind of loan does require some financial discipline.


Want to know more?

Contact us @ propertyloans@realrenta.com and we will arrange for our trusted brokers Jon and Christine to give you a call.







Marlene Liontis
Wednesday, 2 October 2019

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